Banks have filed suits in different courts against 17,000 borrowers who have defaulted on loan repayments worth Rs 265,908 crore at the end of September 2017. This is just 31.73 per cent of the total defaults of Rs 838,000 crore recorded by banks during the period, indicating that loans on which there have been defaults of over Rs 572,000 crore are still in various stages of resolution or are being taken to the courts.
Figures available from Transunion Cibil Ltd show that banks filed cases against 2,000 borrowers for recovery of over Rs 47,000 crore during the 12 months ended September 2017 even as Debt Recovery Tribunals (DRTs) started speeding up disposal of cases. Total suit-filed accounts were 15,220 for defaults of Rs 218,220 crore as of September 2016, CIBIL data says.
State Bank of India tops the list with cases against 3,684 crore defaulters for recovery of Rs 74,649 crore as of September 2017. Punjab National Bank (PNB), which has been under the spotlight for alleged fraudulent transactions of over Rs 12,000 crore, has filed suits against 1,364 borrowers for recovery of Rs 25,608 crore.
The IDBI Bank, which reported that one-fourth of its total advances had turned non-performing assets (NPAs), slapped suits against 1,738 defaulters for recovery of Rs 22,635 crore. Corporation Bank has filed cases against 470 defaulters to recover Rs 9,490 crore.
CIBIL publishes details of suit-filed accounts which owe more than Rs one crore to banks. The figure would increase sharply if defaults below Rs one crore are also taken into account. However, neither the RBI nor credit information companies disclose details of the full list of defaulters which include the who’s who of the corporate sector.
The SBI has filed suits against Lavasa (Rs 88 crore), Winsome Diamonds (Rs 121 crore), Zoom Developers, Rajput Retail (Rs 283 crore), Abhijeet Infra (Rs 102 crore), Corporate Ispat Alloys (Rs 156 crore), Ram Devv International (Rs 282 crore), Ferner Construction (Rs 220 crore), Jay Polychem (Rs 285 crore), PP Jewellers (Rs 127 crore), Shiv-Vani Oil & Agro (Rs 222 crore), Surya Vinayaka Ind (Rs 356 crore), KMP Expressway (Rs 275 crore), Surana Corporation (Rs 396 crore), Hukumchand Mills Rs 1,749 crore, KS Oils (Rs 783 crore) and ABC Cotspin (Rs 403 crore).
Punjab National Bank has filed suits against Gupta Coal India (Rs 321 crore), Crest Steel (Rs 283 crore), Winsome Diamonds (Rs 899 crore), Zoom Developers (Rs 406 crore) and JMD Oils (Rs 236 crore).
The IDBI Bank has filed suits against Jain Infra (Rs 159 crore), Deccan Chronicle (Rs 269 crore), Reid & Taylor (Rs 260 crore), L&T Chennai Tada Tollway (Rs 107 crore) and Indian Metals s & Ferro Alloys (Rs 393 crore). However, IMFA (Indian Metals and Ferro Alloys), India’s largest integrated ferro chrome company, has said it has no dues with IDBI Bank and such issues have been resolved way back in 2008.
Corporation Bank has filed cases against Nakoda (Rs 291 crore) and UB Engineering (Rs 152 crore). Standard Chartered Bank has taken ABG Shipyard (Rs 494 crore), Etisalat (Rs 1,465 crore) and Winsome Diamonds (Rs 414 crore) to the courts.
Axis Bank has filed cases against Sevenhills Healthcare (Rs 611 crore) and Parekh Aluminex (Rs 317 crore), among others. The ICICI Bank has slapped suits against Sherlin Prop & Developers (Rs 231 crore), Gupta Coal (Rs 198 crore) and Hanung Toys & Textiles (Rs 203 crore).
According to RBI data, NPAs recovered by banks through DRTs showed a rise of 156 per cent during fiscal 2016-17 but recovery under the SARFAESI Act declined. While Rs 16,400 crore was recovered through DRTs in 2016-17 against Rs 6,400 crore in 2015-16, only Rs 7,800 crore was recovered under SARFAESI Act against Rs 13,200 crore previously. A total of Rs 28,000 crore NPAs was recovered through three channels in 2016-17 as against Rs 22,800 crore a year ago.
The RBI said Rs 286,000 crore worth of loans was referred to three recovery routes against Rs 221,400 crore a year ago. The total number of cases referred by banks to the three channels (DRTs, Lok Adalat and SARFAESI Act) fell sharply from 46,54,753 in 2015-16 to 22,61,873 in 2016-17 — the main reason being that cases filed through Lok Adalats declined by 50 per cent to 21,52,895 in 2016-17, the RBI said in a report last month.
Rating agency Care Ratings has said gross NPAs of 36 banks (21 PSBs and 15 private banks) rose from Rs 2.94 lakh crore in March 2015 to Rs 3.32 lakh crore in September 2015 and then rose sharply to reach Rs 8.38 lakh crore by September 2017. The overall growth over March 2015 was 185 per cent and 152 per cent over September 2015. In terms of incremental NPAs, the highest was witnessed in March 2016 at Rs 1.39 lakh crore over December 2015 and the second highest was in June 2017 over March 2017 at Rs 1.17 lakh crore.
There was moderation in NPA creation in the quarter ended September 2017 when the increase was just about Rs 11,000 crore. “If such a tendency persists in the next two quarters, it may be concluded that the recognition issue has been adequately addressed by banks,” it said.
“The stock of gross NPAs in the banking system is seen rising to Rs 9.5 lakh crore by the end of this fiscal. NPAs started rising fast since fiscal 2015, and trebled from Rs 3.2 lakh crore seen then, after the RBI pushed banks to recognise NPAs on time rather than kick the can down the road,” rating firm Crisil said.