Government to make wilful default a criminal offence

Zee Media Bureau

New Delhi: In order to tackle the crisis on bad loans, the Centre is contemplating a revamp on  loan defaulters, as per a newspaper report.

A report in the Times of India said that government might make wilful default a criminal offence under the Indian Penal Code.

There are some 7,686 wilful defaulters who owe Rs 66,190 crore to PSBs, 6,816 suits have been filed and FIR has been lodged in 1,669 cases.

Banks have initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi) Act in 584 such cases.

Amid outrage over embattled Vijay Mallya's alleged massive loan default, Finance Minister Arun Jaitley and RBI Governor Raghuram Rajan had cautioned against going on a "fishing expedition" on bad loans so that it doesn't make banks worried about lending in future.

Gross NPA of public sector banks (PSBs) rose to Rs 3.61 lakh crore while that of private lenders was at Rs 39,859 crore at the end of December 2015.

Gross NPA ratio as percentage of advances rose to 7.30 percent while for private banks, it stood at 2.36 per cent as of December-end.