Friday, December 6, 2013

50 corporate houses owe more than Rs 40,000 cr to PSU banks

AT A time when the menace of bad loans has taken an alarming proportion, All India Bank Employees Association (AIBEA), has come out with a list of top 50 corporate defaulters. Around 25 percent of the total non-performing assets (NPAs) or bad loans in public sector banks (excluding SBI) is accounted for by 50 big companies. Kingfisher Airlines and Winsome Diamond top the list of defaulters.
Total default by the 50 corporates totalled to...
Rs 40,528 crore of bank loans, says the list. The total NPAs of public sector banks stood at Rs 1,64,461 crore. Vijay Mallya's Kingfisher Airlines owes Rs 2,673 crore as per the combined NPA list of PSU banks released by the AIBEA.
Winsome Diamond of Jatin Mehta owed Rs 2,660 crore, Electrotherm India Rs 2,211 crore, Zoom Developers Rs 1,810 crore, Sterling Biotech Rs 1,732 crore and S Kumars Nationwide Rs 1,692 crore. Winsome group company Forever Precious Jewellery has defaulted Rs 1,254 crore, Orchid Chemicals Rs 938 crore, Deccan Chronicle Rs 700 crore and Delhi Airport Metro Express by Rs 346 crore.
Educomp and several infra projects such as Lanco Hoskote are also among the defaulters.
"Since the RBI and the government are not publishing the list of loan defaulters, AIBEA will shortly publish a booklet containing the names of the top 30 defaulters in each bank," said AIBEA general secretary CH Venkatachalam.
CIBIL and other credit information companies, which are authorised by the RBI to keep track of bad lans data, reveal only the names of defaulters against whom banks have filed suits.
"Banks should publish the list of loan defaulters of Rs 1 crore and above and make willful default of loan a criminal offence. There should be an investigation to probe the nexus and collusion while siphoning off bank money. The government should amend recovery laws to speed up recovery of bad loans," Venkatachalam added.
"We are witnessing looting of public money from the banks. On paper every thing is perfect, but borrowers don't have the capacity to set up the project and repay the loan," he said. Most of these 50 defaults occurred in the last two years.
"If you include the NPAs of around Rs 15,000 crore in SBI, bad loans of top corporates would touch Rs 65,000 crore. Details on SBI's NPAs would be released in a couple of days," he said.
While the common refrain is that the rising NPAs are due to the effect of the global financial crisis, RBI data indicates that the credit administration in the banks had started weakening and the asset quality had started worsening even before the beginning of the crisis.
RBI deputy governor KC Chakrabarty had earlier slammed the banks for poor management of bad assets. "Write offs contributed significantly to the reduction in the quantum of gross NPAs (in some years, write offs accounted for nearly 50 percent of reduction) as compared to actual recoveries and upgradations. These practices clearly engender moral hazard issues as they reduce the banks' drive to improve recovery efforts," he said.

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