The head office of State Bank of India in New Delhi. Photo: Reuters

Indian banks are saddled with over Rs 1.9 trillion (US$ 20 billion) of bad debts caused by wilful defaulters — those who have the capacity to repay loans, but refuse to do so or spend it for purposes other than that was agreed upon, according to TransUnion CIBIL, a credit information bureau.

The data shows that wilful defaults by borrowers from banks rose 45% from Rs 746.94 billion (US$ 11.68 billion) in March 2016 to Rs 1.09 trillion as of March 2017. It raises serious questions about credit risk, due diligence and accountability of these banks.

The country’s leading state-owned bank State Bank of India topped the list with Rs 150.69 billion (US$ 2.34 billion) stuck among 997 accounts of borrowers. It recorded a rise of Rs 27.59 billion (US$ 43 million) in fiscal 2017. Another state-owned bank Punjab National Bank was second with wilful defaults of Rs 109.89 billion (US$ 1.70 billion) in 871 accounts.

While companies such as Kingfisher Airlines, Zoom Developers and Winsome Diamonds do make news for being rogue defaulters, there are numerous others who stay away from headlines because they owe a lesser amount to banks.

Over the past five years, wilful defaults rose by over Rs 840 billion (US$ 13.12 billion) from Rs 254 billion (US$ 3.97 billion) in March 2013. Fiscal 2016 witnessed a spurt of 31%, and fiscal 2015 saw an increase of 47.5% in such defaults, according to the data.

C.H. Venkatachalam, general secretary, All India Bank Employees Association, has proposed that wilful default of bank loans should be declared a criminal offence and action should be initiated against defaulters, reports Indian Express.