Lok Sabha Question No. 6563 (UNSTARRED), answered on 2018-04-06
Subject: Action against Loan Defaulters
Ministry: FINANCE
Asked by: DEVENDRA (ALIAS) BHOLE SINGH SINGH, RAMESH CHANDER KAUSHIK

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA

UNSTARRED  QUESTION  NO: 6563 TO BE ANSWERED  ON THE 6th APRIL,  2018/CHAITRA  16, 1940 (SAKA)

## QUESTION ACTION AGAINST  LOAN DEFAULTERS

## 6563:  SHRI DEVENDRA SINGH BHOLE: SHRI  RAMESH  CHANDER  KAUSHIK:

Will  the Minister  of FINANCE  be pleased to state:

- a) the number  of loan  applications  disposed of by  the banks,  State/UT-  wise;
- b) the details  of the loan  defaulters  of more  than  Rs. 50 lakhs  and the amount  recovered from them till  date;
- c) the number  of loan defaulters  against  whom  action  has been taken  during  the last five years;
- d) the number  of people who  have repaid  the loan amount  so far after action has been taken  against  them  and the amount  received  through  it;
- e) the remedial  steps taken/being  taken  by  the Government/Reserve Bank of India for speedy  recovery  and reducing  the number  of Non-Performing Assets;  and
- f) if so, the details  thereof  and it not,  the reasons  therefor?

## ANSWER To be answered by THE MINISTER  OF STATE  IN THE  MINISTRY  OF FINANCE

## (SHIV PRATAP  SHUKLA)

- (a): As per data reported  by  Public  Sector  Banks  (PSBs), 3,23,53,650  loan  applications  were disposed of during  financial  year  2016-17 and 2,81,30,755  during  financial  year  2017-18 for the period  till  31.12.2017.
- (c)  and  (d):  As  per  data  reported   by   PSBs,  as  on  31.12.2017,   2,108  FIRs  have  been registered  against  wilful  defaulters,  8,462 suits have been filed for recovery  from  them,  and action  has been initiated  under the Securitisation   and Reconstruction of  Financial  Assets and Enforcement  of Security  Interest (SARFAESI)  Act in respect of 6,962 cases of wilful defaulters.
- (b):  With   regard   to  details   of  loan   defaulters   of  more   than   Rs.  50  lakh   and  the  amount recovered   therefrom,   the  Reserve   Bank of  India  (RBI)  has  apprised   that   it  is  unable   to disclose  the  information   under the provisions  of Section  45E of RBI Act 1934. Section 45E provides  that  credit  information submitted  by  a bank  shall  be treated  as confidential and not be published  or otherwise disclosed.

As  per  data  reported   by   PSBs,  during   the  period   from   1.4.2011 till   31.12.2017,   they recovered  Rs. 5,380 crore  from wilful  defaulters  having  outstanding  amount  of Rs. 5 crore and above.

To reduce incidence  of default  on account  of and effect recovery  from  wilful  defaulters,  as per RBI's instructions, wilful  defaulters  are not sanctioned  any  additional  facilities  by  banks or financial   institutions, their   unit   is  debarred   from   floating   new   ventures   for  five  years, and lenders  may  initiate  criminal  proceedings  against  them,  wherever  necessary.  Securities and Exchange Board of India Regulations  have been amended  to debar wilful  defaulters and  companies   with   wilful   defaulters   as  promoters/directors from  accessing  capital markets  to raise funds. Further,  the Insolvency  and Bankruptcy Code has been amended  to debar wilful  defaulters  from  participating in the insolvency  resolution  process.

(e) and (f): To reduce/contain  NPAs  of banks,  the Insolvency  and Bankruptcy Code,  2016 has  been  enacted   for  time-bound   resolution   of  stressed  assets.  Further,   the  Banking Regulation  Act,  1949 has been amended  to provide  for authorisation by the Government to RBI, for issuing  directions  to banks  to initiate  the insolvency  resolution  process under the Code.  Under  the provisions  of this amending  legislation,  RBI has issued directions  to certain  banks  for referring  12 accounts,  with  outstanding  amounts  greater  than  Rs. 5,000 crore   and  with   60%  or  more   classified   as  non-performing as  of  31.3.2016,   to  initiate insolvency  resolution  process under the Code.  In accordance  with  these directions,  banks have  filed  applications   in  respect   of  these  accounts   before  the  National   Company   Law Tribunal . Further,  keeping  in view  the enactment  of the Code,  RBI has issued a revised framework  for resolution  of stressed assets, which  provides  for time-bound  resolution  of high-value   stressed  accounts.   The  SARFAESI   Act   has  been  amended   to  make   it  more effective.   Further,   six  new   Debts  Recovery   Tribunals   have  been  established to  expedite recovery.  In addition,  under the PSB Reforms  Agenda,  PSBs have committed, inter-alia, to create  Stressed  Asset  Management   verticals   for  stringent   recovery   and  ensure   clean   and effective post-sanction  follow-up  for large  credit  exposures  through  specialised  monitoring agencies.