With unpaid dues of Rs.8,738 cr, Mehul Choksi tops the list of wilful defaulters
The Finance Ministry on Tuesday said the top 50 wilful defaulters including Gitanjali Gems Limited, Era Infra Engineering Limited, REI Agro Limited, and ABG Shipyard Limited owe Rs.87,295 crore to banks and financial institutions. Of this, the top 10 wilful defaulters owe Rs.40,825 crore to schedule commercial banks (SCBs), Minister of State for Finance Bhagwat Karad said in a written reply in Rajya Sabha.
SCBs have written off an aggregate amount of Rs.10,57,326 crore during the last five financial years (RBI provisional data for FY 2022-23), he said. “The Reserve Bank of India (RBI) has apprised that the amount owed by top 50 wilful defaulters in SCBs was Rs.87,295 crore as on March 31, 2023,” he said. Fugitive Mehul Choksi‘s Gitanjali Gems is the biggest wilful defaulter owing Rs.8,738 crore to banks. It is followed by Era Infra Engineering Limited owing Rs.5,750 crore, REI Agro Limited Rs.5,148 crore, ABG Shipyard Limited Rs.4,774 crore, and Concast Steel and Power Limited Rs.3,911 crore.
Other wilful defaults are Rotomac Global Private Limited Rs.2,894 crore, Winsome Diamonds and Jewellery Limited Rs.2,846 crore, Frost International Limited Rs.2,518 crore, Shri Lakshmi Cotsyn Limited Rs.2,180 crore, and Zoom Developers Private Limited Rs.2,066 crore. Minister said the provision enabling banks to enter into compromise settlement in respect of borrowers categorized as fraud or wilful defaulter is not a new regulatory instruction and has been the settled regulatory stance for more than fifteen years.
“RBI had advised IBA, vide letter dated May 10, 2007, that, banks may enter into compromise settlement with wilful defaulters/ fraudulent borrowers without prejudice to the criminal proceeding underway against such borrowers and all such cases of compromise settlements should be vetted by Management Committee/ Board of banks,” he said.
Further, he said, compromise settlement with borrowers classified as wilful defaulters or fraud is also covered in RBI’s Master Circular on Wilful Defaulters dated July 1, 2015, and Master Directions on Frauds dated July 1, 2016. The compromise settlement, however, is not a matter of right for borrowers but is a discretion to be exercised by lenders based on their commercial judgments, he said.
As per RBI’s circular dated June 8, 2023, he said, regulated entities may undertake compromise settlements or technical write-offs in respect of accounts classified as fraud or wilful defaulter without prejudice to the criminal proceeding underway against such borrowers, and all such proposals need to be approved by the board. As per inputs received from RBI, he said, the framework prescribes the minimum cooling-off period of 12 months as a general prescription for normal cases of compromise settlements, without prejudice to the penal measures applicable in respect of borrowers classified as wilful defaulters.
In a separate reply, Karad said 66,069 frauds were reported in 2022-23 causing a loss of Rs.85.25 crore. In the previous year, 65,893 frauds were reported with financial implications of Rs.115.36 crore.
PGurus is now on Telegram. Click here to join our channel and stay updated with all the latest news and views
For all the latest updates, download PGurus App.
- Madras High Court passes interim order asking BJP MLAs to return temple land acquired illegally - September 27, 2023
- Delhi court denies bail to Maltese man, who assisted Kamal Nath’s nephew, in money laundering case - September 27, 2023
- Ayodhya Ram Mandir ground floor to be completed by December-end, ‘Pran Pratishtha’ on Jan 22 - September 26, 2023
