Public Sector Banks (PSB) Flag 1,629 Wilful Defaulter Cases Worth â‚ą1.62 Trillion as of March 31, 2025.

Banking & Finance

As of 31 March 2025, Public Sector Banks (PSBs) in India have identified 1,629 wilful defaulter cases with combined outstanding dues of â‚ą1.62 trillion, according to a recent disclosure by the Union Finance Ministry. These loans are from entities capable of repaying but deliberately avoiding repayment, posing a serious concern for banking sector health.


      - In response to the crisis, the government has initiated multiple legal and administrative recovery mechanisms, including actions under the SARFAESI Act, the Insolvency and Bankruptcy Code (IBC), and through public disclosure via credit bureaus such as CIBIL and Experian.

      - This issue is particularly alarming because it coincides with slower deposit growth and increasing credit risk across PSBs — factors that reduce banks’ capacity to absorb financial shocks.

     

Main Point :-   (i) As a comparison, the All India Bank Employees’ Association had earlier (in 2020) issued a list of 2,426 wilful defaulter accounts owing â‚ą1.47 lakh crore, underscoring longstanding systemic problems.

      (ii) Top institutions bear much of the burden: State Bank of India (SBI) alone has hundreds of wilful defaulter accounts amounting to tens of thousands of crores. Other major PSBs like Punjab National Bank, Union Bank, and Bank of Baroda have also reported high non‑performing dues.

(iii) The Finance Ministry and the Reserve Bank of India (RBI) have recommended stringent reporting norms: PSBs must obtain passports of large borrowers, publish defaulter profiles, issue Look Out Circulars, and prevent wilful defaulters from accessing credit or capital markets.

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