Seven fugitive economic offenders, including Vijay Mallya, Nirav Modi and Mehul Choksi, have not repaid loans of Rs 37,186 crore, the finance ministry informed Parliament on Tuesday.
The other such economic offenders, declared fugitive after 2014, are Sterling Biotech’s Nitin Jayantilal Sandesara, Chetan kumar Jayantilal Sandesara, Dipti Chetan Sandesara and Hitesh Kumar Narendrabhai Patel.
In a written reply in the Rajya Sabha, minister of state for finance Bhagwat Karad said action by the Enforcement Directorate (ED) resulted in the attachment/seizure of assets worth Rs 33,862 crore, out of which assets of Rs 15,113 crore have been returned to state-run banks. Further, the banks have realised Rs 7,975 crore from the sale of assets handed over to them by the ED, Karad said.
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Mallya is accused in a loan default case of over Rs 9,000 crore involving now-defunct Kingfisher Airlines. Both Nirav Modi and Choksi are wanted in a Rs 13,500-crore fraud case involving state-run Punjab National Bank. The Sandesara family, too, is accused of defrauding banks.
To crack down on such defaulters, the government had brought in a law in 2018 to attach assets of fugitive economic offenders who flee India to escape the reach of law even without a conviction.
Karad said banks have written off Rs 10.1 trillion over the past five years. State-run lenders accounted for about 73% of the write-offs involving outstanding loans of Rs 7.35 trillion.
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Usually, non-performing assets are removed from the balance-sheet of the bank concerned by way of write-off. Banks typically resort to write-offs, as part of their regular exercise, to clean up their books, avail tax benefit and optimise capital, in accordance with RBI guidelines and the policy approved by their boards, Karad said.
The borrowers of the written-off loans, however, continue to be liable for repayment and banks continue to pursue recovery actions.