With the government and Reserve Bank of India (RBI) taking a tough stand against willful defaulters, public sector banks have launched loan recovery operations against a staggering 5,954 willful defaulters. Earlier governments may not have shown a keen interest to recover loans, which acted as a hindrance to public sector banks to recover their dues. However, with the current government and the RBI both supporting loan recovery, public sector banks have initiated loan recovery action against 5,954 willful defaulters. The loan recovery action has been initiated under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act. As of now, these 5,954 willful defaulters owe a massive Rs 70,000 crore to public sector banks. These willful defaulters are like termites that are destroying the economic system inside out.
Willful defaulters create a vicious circle, as they block funds for economic development. Banks are not able to recover their dues and they are unable to release new funds. Even genuine businesses are therefore unable to secure loans from banks. This in turn effects economic development. The State Bank of India (SBI) tops the list in terms of the action taken against willful defaulters. SBI has taken action against 1,444 defaulters who collectively owe Rs 20,943 crore. Action against the remaining 4,510 defaulters was taken by other banks.