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New RBI data shows wilful defaulters are laughing all the way away from banks

Banks are almost sitting ducks with wilful defaulters. Most of the money lent to these defaulters, besides the huge corporate loan write-offs, is as good as gone. Ultimately, this is public money

December 20, 2022 / 08:43 AM IST
As per the data, Gitanjali Gems, promoted by fugitive economic offender Mehul Choksi, tops the list with Rs 7,848 crore

As per the data, Gitanjali Gems, promoted by fugitive economic offender Mehul Choksi, tops the list with Rs 7,848 crore

The saying goes if you owe the bank $100 that is your problem; if you owe the bank $100 million, that's the bank's problem.

Banks put all their might to get the money back from retail borrowers if they default on a car or an auto loan. Delay one instalment and banks come knocking on the door. They even resort to naming and shaming tactics, using third parties. The tactics seem to work in most cases and the borrower pays back.

But it is an entirely different game when it comes to corporate loan default, which is at a much bigger scale. Banks seem to forget their drill when faced with powerful defaulters, who have a battery of lawyers which drag the lenders from court to court for years on end. And in the end, banks have little to show by way of recovery.

The numbers game