Mehul Choksi’s Gitanjali Gems among 2,600+ wilful defaulters owe ₹1.96 lakh crore: RBI

Reserve Bank of India (RBI) has flagged 2,664 companies as wilful defaulters, revealing a significant issue in the banking sector. These companies have collectively failed to repay loans amounting to ₹1.96 lakh crore, despite having the capacity to do so. This concerning trend raises alarms over financial risks posed by large corporate borrowers to the banking system.

Livemint could not independently verify this news development.

Based on data disclosed by the RBI for March 2024, the list of defaulters is topped by Gitanjali Gems Ltd, which owes ₹8,516 crore. Responding to an RTI filed by The Indian Express, the central bank provided a breakdown of the top 100 defaulters, excluding individuals and foreign entities. The second spot is held by ABG Shipyard, which has an outstanding amount of ₹4,684 crore.

Top 10 Corporate Defaulters

Gitanjali Gems Ltd: ₹8,516 crore

ABG Shipyard Ltd: ₹4,684 crore

Concast Steel & Power: ₹3,557 crore

Era Infra Engineering: ₹3,507 crore

Winsome Diamonds & Jewellery: ₹3,356 crore

Transstroy (India): ₹3,261 crore

Rotomac Global: ₹2,894 crore

Zoom Developers: ₹2,217 crore

Unity Infraprojects: ₹1,987 crore

The number of wilful defaulters has risen steadily over the past four years, climbing from 2,154 in March 2020 to 2,664 by March 2024. The amount of unpaid dues has surged from ₹1.52 lakh crore to ₹1.96 lakh crore during the same period.

As per RBI norms, a borrower is labeled as a wilful defaulter if they default on repayments despite having the financial capacity to pay or if the funds are misused for purposes other than stated in the loan agreement. This includes siphoning or diverting money away from the intended projects.

One striking case involves Gitanjali Gems, promoted by Mehul Choksi, who fled India after being implicated in the ₹14,000-crore Punjab National Bank fraud. Investigations revealed that the company had illegally removed assets used to secure loans without informing the lenders. Choksi and his nephew Nirav Modi are also under investigation for multiple cases of fraud.

Another notable name on the defaulters’ list is ABG Shipyard. The company’s management allegedly misused loans meant for developing its shipyard and committed large-scale financial irregularities. Other companies in the top 10 include Winsome Diamonds, Transstroy India, and Concast Steel & Power, with debts running into thousands of crores.

The RBI’s list also highlighted that Rotomac Global, which owes ₹2,894 crore, and Unity Infraprojects, with dues of ₹1,987 crore, were among those identified as wilful defaulters.

The central bank’s data underscores significant lapses in the lending and monitoring processes. Investigations into these borrowers are ongoing, involving agencies such as the Serious Fraud Investigation Office (SFIO) and the Enforcement Directorate (ED), particularly for cases involving fund diversion or fraudulent practices.