FM Nirmala Sitharaman to meet PSB heads on December 30, focus on wilful defaulters

The Reserve Bank of India's (RBI) latest report on the Trends and Progress of Banking in India shows an over 5 times increase in the number of card and internet-related frauds in the first half of this financial year versus H1 of last fiscal. This is despite a big drop in the overall amounts and type of fraud reported.

For instance, during the April-September financial year, 2,321 cases of card and internet fraud were reported amounting to ₹87 crore. In the same period this financial year, the number of fraud transactions has jumped to 12,069 while the amount involved has increased to ₹630 crore.

This is despite a drastic decline in the number of total bank frauds reported from ₹17,685 crore in H1 FY23 to ₹2,642 crore in H1 FY24, with the number of fraud cases also having fallen.

While some progress is visible in tackling bank frauds — on wilful defaulters, the needle probably hasn’t moved much as far as outcomes are concerned. The government recently informed Parliament that as of March 31, 2023, a total of 2,623 unique borrowers were classified as wilful defaulters, with aggregate outstanding of ₹1,96,049 crore or ₹1.96 trillion, by scheduled commercial banks.

Scheduled Commercial Banks (SCBs) and All India Financial Institutions report certain credit information of all borrowers having aggregate exposure of ₹5 crore and above to the Central Repository of Information on Large Credits (CRILC).

Similarly, the FM is also likely to review the progress of the bad bank. Parliament was recently informed that barely ₹12,000 crore worth of bad debt of government-owned banks has been transferred to the NARCL while the recovered amount so far is ₹16 crore.

During 2018-2023 alone, commercial banks wrote off bad loans worth over ₹10.8 trillion, with over half the big non-performing assets (NPAs) emanating from large industries. Along with the IBC, the government is trying to bring the bad bank alive to help recover written-off bad debt.