30-12-2022, 08:13 AM
Rohini Mohan
India Correspondent
UPDATED 7 HOURS AGO
BENGALURU - The finance ministry of India has revealed that banks have written off 10 trillion rupees (S$163 billion) in bad loans over the past five years. The biggest defaulters are absconding billionaires and some of India’s oldest companies.
......
only 10.3 per cent of the 10 trillion rupees written off have been recovered from defaulting corporations.
To tide themselves over written-off loans that they cannot recover from borrowers, banks usually count on government bailouts using taxpayer money
......
the total number of “suit-filed wilful defaulters” grew 65 per cent from 8,744 in June 2017 to 14,485 in June 2022. The RBI uses the term for those who deliberately use the banking system to not repay dues, unlike people who might have genuinely fallen into debt.
......
outstanding loans to wilful defaulters as at June 30 stood at 2.76 billion rupees – a third of this amount was owed by 50 big defaulters.
......
an insolvency case took an average of 464 days in March 2021 to be resolved. As at Sept 30 this year, timelines had increased to 785 days, according to the Insolvency and Bankruptcy Board of India.
This gives ample time for defaulters to flee. Most of the top 50 loan defaulters in India are on the run.
......
Diamond merchant Mehul Choksi, whose Gitanjali Gems tops the RBI’s list of 50 worst defaulters of bank loans, fled India in January 2018.
Choksi owes several Indian banks a total of 140 billion rupees borrowed via his various firms, including 78.48 billion through Gitanjali Gems. But he is now living as a citizen of Antigua and Barbados Isles, a popular tax haven that India does not have an extradition treaty with.
He has been charged by at least four government agencies over financial crimes such as cheating a consortium of banks and destroying evidence.
The second-worst defaulter is Era Infra Engineering, which owes 58.79 billion rupees to Indian banks. Its managing director Hem Singh Bharana allegedly took loans from financial institutions and banks through his construction company and laundered the money. From 2014, the police and financial crimes regulator have charged him with duping not only banks, but also over 30 lending institutions and nearly 3,000 homebuyers to the tune of 160 billion rupees. Bharana’s whereabouts are unclear.
REI Agro is the third-biggest defaulter, owing 48.03 billion rupees to 14 banks. Its directors Sandip Jhujhunwala and Sanjay Jhunjhunwala are under investigation.
Jatin Mehta, the founder of Winsome Diamonds and Jewellery that is seventh on the bad borrowers list, flew to the United Kingdom with his wife and two sons in 2013. The Central Bureau of Investigations has booked him for swindling 15 banks by allegedly importing gold on falsified guarantees from Indian banks, and selling it to ghost companies in the UAE.
More at: https://www.straitstimes.com/asia/south-...-bad-loans
India Correspondent
UPDATED 7 HOURS AGO
BENGALURU - The finance ministry of India has revealed that banks have written off 10 trillion rupees (S$163 billion) in bad loans over the past five years. The biggest defaulters are absconding billionaires and some of India’s oldest companies.
......
only 10.3 per cent of the 10 trillion rupees written off have been recovered from defaulting corporations.
To tide themselves over written-off loans that they cannot recover from borrowers, banks usually count on government bailouts using taxpayer money
......
the total number of “suit-filed wilful defaulters” grew 65 per cent from 8,744 in June 2017 to 14,485 in June 2022. The RBI uses the term for those who deliberately use the banking system to not repay dues, unlike people who might have genuinely fallen into debt.
......
outstanding loans to wilful defaulters as at June 30 stood at 2.76 billion rupees – a third of this amount was owed by 50 big defaulters.
......
an insolvency case took an average of 464 days in March 2021 to be resolved. As at Sept 30 this year, timelines had increased to 785 days, according to the Insolvency and Bankruptcy Board of India.
This gives ample time for defaulters to flee. Most of the top 50 loan defaulters in India are on the run.
......
Diamond merchant Mehul Choksi, whose Gitanjali Gems tops the RBI’s list of 50 worst defaulters of bank loans, fled India in January 2018.
Choksi owes several Indian banks a total of 140 billion rupees borrowed via his various firms, including 78.48 billion through Gitanjali Gems. But he is now living as a citizen of Antigua and Barbados Isles, a popular tax haven that India does not have an extradition treaty with.
He has been charged by at least four government agencies over financial crimes such as cheating a consortium of banks and destroying evidence.
The second-worst defaulter is Era Infra Engineering, which owes 58.79 billion rupees to Indian banks. Its managing director Hem Singh Bharana allegedly took loans from financial institutions and banks through his construction company and laundered the money. From 2014, the police and financial crimes regulator have charged him with duping not only banks, but also over 30 lending institutions and nearly 3,000 homebuyers to the tune of 160 billion rupees. Bharana’s whereabouts are unclear.
REI Agro is the third-biggest defaulter, owing 48.03 billion rupees to 14 banks. Its directors Sandip Jhujhunwala and Sanjay Jhunjhunwala are under investigation.
Jatin Mehta, the founder of Winsome Diamonds and Jewellery that is seventh on the bad borrowers list, flew to the United Kingdom with his wife and two sons in 2013. The Central Bureau of Investigations has booked him for swindling 15 banks by allegedly importing gold on falsified guarantees from Indian banks, and selling it to ghost companies in the UAE.
More at: https://www.straitstimes.com/asia/south-...-bad-loans
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