Padma Awardees, Union Minister, MPs among top loan defaulters
July 13, 2025
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Padma Awardees, Union Minister, MPs among top loan defaulters

by Archive Manager
May 14, 2014, 12:00 am IST
in General
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In a major embarrassment to the Congress-led UPA government at the Centre, which is aggressively trying to showcase its 10-year achievements in its election campaigns, a list of top bank loan defaulters released by the All India Bank Employees Association (AIBEA) has exposed that the Indian public sector banking is riding on a bad loan of whopping Rs 2.36 lakh crore.

The AIBEA — the largest union in the banking sector has come up with a list of top loan defaulters in the country comprising corporates, sitting union minister, politicians and even Padma Awardees.

As per the list of bad loan defaulters, the top 406 accounts of the Public Sector Banks (PSBs) amount to Rs 70,300 of non-performing assets (NPAs) with the figure in September 2013 at Rs 2.36 crore against Rs 39,000 crore in March 2008.

The Top Defaulters

Vijay Mallya, Kingfisher Airlines, Rs 2,673 crore

Raghavendra Rao, CMD of Orchid Chem & Pharma
Rs 938 crore

Deepak Puri, CMD of Moser Baer India Ltd., Rs 581 crore

KS Rao, Union Textile Minister, Progressive Construction Ltd.,
Rs 351 crore

S Kumar, Nationwide Limited along with its unit Reid & Taylor, Rs 1,758 crore

 
Corporate Power & Corporate Ispat Alloys,
Rs 1,359 crore

Winsome Diamond & Jewel, Rs 3,156 crore

Electrotherm India,
Rs 2,211 crore

 

Even as Vijay Mallya is busy cheering his IPL outfit Royal Challenge Bangalore these days, his ambitious company Kingfisher Airlines continues to see red, as it has a bad loan of Rs 2,673 crore. The few others according to the list issued in Chennai by the AIBEA, to have crossed Rs 1,000 crore mark are S Kumar Nationwide Limited along with its unit Reid & Taylor (Rs 1,758 crore), Corporate Power & Corporate Ispat Alloys (Rs 1,359 crore), Winsome Diamond & Jewel (Rs 3,156 crore), Electrotherm India (Rs 2,211 crore), Surya Vinayak Industries (Rs 1,446 crore) etc.

“NPA is the biggest enemy of banking sector and the government has failed to take any concrete measure against wilful defaulters. These defaulters should be booked under the charges of criminal offence and appropriate recovery process should be initiated,” said General Secretary, AIBEA, CH Venkatachalam.

“The banking sector has been losing a huge interest on these bad loans, which otherwise could have been used for the welfare of this sector like technology up-gradation, customer welfare, etc,” said Venkatachalam.

According to banking sector sources, even if an average rate of interest at 10 per cent is charged on Rs 2.36 lakh crore of bad loans, Rs 24,000 crore could have been earned.

The AIBEA has alleged that apart from the corporate, even Padma awardees like Raghavendra Rao, the CMD of Orchid Chemicals & Pharmaceuticals with Rs 938 crore bad loan and, Deepak Puri, CMD of Moser Baer India Ltd with Rs 581 crore bad loan are in the list. Both Rao and Puri were awarded Padma Shri respectively in 2011 and 2010.

“This is an irony in our country that even a Central Minister and a five-term MP like Union Textile Minister KS Rao’s company Progressive Construction Ltd has a bad loan of Rs 351 crore,” Venkatachalam alleged.

The document accompanying the list shows that the PSBs have restructured bad loans and showed it as good loans of Rs 3.25 lakh crore.

“This is nothing but eyewash. The banks have played foul by extending the payment period and showed a portion of bad loan as good loan, so that they don’t have to bear the onus of high NPAs on them. In fact, Rs 3.25 lakh crore should also be added with bad loan of Rs 2.36 lakh crore,” said Joint Secretary, AIBEA, VK Sharma.

The list shows that the bad loans in 172 corporate accounts (Rs.100 crore and above) stand at Rs 37,000 crore and fresh bad loans in the last seven years amount to Rs 4.95 lakh crore.

“That is why we’ve been demanding the government not to incentivise the corporates and the Reserve Bank should periodically publish a list of defaulters,” he said.

Although the RBI hasn’t published any defaulters’ list yet, its Governor Raghuram Rajan last year had warned the banks against dressing up bad loans with a symbolic comparison — “One can put lipstick on a pig but it doesn't become a princess.”

Rajan had said restructuring as a legitimate attempt to deal with changes that have happened, but it also creates larger problems in future.

Meanwhile, the AIBEA, with a membership of more than five lakh bank employees, had already written to the Chief Election Commissioner not to allow the politicians, who were wilful bank loan defaulters, to contest elections.

With the publication of the list, the AIBEA has launched a nationwide campaign emphasising that the RBI should periodically publish the list, the Centre should amend recovery laws and take criminal action against willful defaulters.

“The new government that will be formed after the General Elections must take a note of this,” added Sharma, also general secretary of Madhya Pradesh chapter of AIBEA.

According AIBEA, the top 12 defaulters owe more than Rs.20, 000 crore with Kingfisher Airlines leading the list, Punjab National Bank is the worst sufferer followed by Central Bank of India.

– Debobrat Ghose

(The writer is a Delhi-based journalist, who writes on various national issues and specializes in Madhya Pradesh and Chhattisgarh).

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