Giving information in Parliament on Monday, the government said that the top 10 willful defaulters including ABG Shipyard, Gitanjali Gems and Housing Development and Infrastructure owe Rs 40,635 crore to banks till March 31, 2025. Finance Minister Nirmala Sitharaman said in a written reply in the Lok Sabha that ABG Shipyard Limited tops the list, which owes Rs 6,695 crore to banks.
After this, Gitanjali Gems owes Rs 6,236 crore, Beta Naphthol owes Rs 5,268 crore and Rakesh Kumar Kuldeep Singh Wadhawan owes Rs 4,291 crore. Apart from this, former directors of Bhushan Power and Steel Limited owe Rs 3,810 crore to banks, Raza Textiles Rs 3,260 crore, Gilt Pack Rs 3,080 crore, Rank Industries Rs 2,655 crore and Housing Development and Infrastructure Rs 2,540 crore.
compromise settlement
He further said that the Reserve Bank of India (RBI), through its Master Guidelines on ‘Treatment of Willful Defaulters and Major Defaulters’, has advised lenders to submit the list of willful defaulters to all Credit Information Companies (CICs) on a monthly basis, and the CICs are required to display the list on their respective websites. He said that as per the information received from RBI, any bank can make compromise settlements in respect of those accounts which have been categorized as willful defaulters; Doing so will not have any adverse impact on the ongoing criminal proceedings against these borrowers.
Purpose of Compromise Settlement
He said the main regulatory objective behind allowing compromise settlement by willful defaulters is to provide multiple avenues to lenders to recover the defaulted amount without unnecessary delay. Apart from the value loss that occurs over time, excessive delays also lead to a decline in the value of assets, which ultimately hampers the recovery process, he said. He further informed that compromise settlement has been recognized as a valid resolution mechanism under the RBI (Resolution of Commercial Bank Stressed Assets) Directions, 2025.
The logic behind compromise settlement
Further, he said that when it comes to recovery from willful defaulters, the priorities or imperatives for lenders are in no way different. He said the persistence of such risks on lenders’ balance sheets, without any resolution due to legal proceedings, traps lenders’ funds in an unproductive asset, which is not a desirable situation.
Furthermore, the continuation of criminal proceedings being initiated or initiated against a willful defaulter ensures that those guilty of any mala fide act do not go unpunished. He further said that lenders do not have the facility to claim settlement as a matter of right under the agreement; Rather, it is the discretion of the lenders, which they use based on their business judgment.