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Stressed asset fund: a pill for India's bad loans? [Representational Image]: Commuters walk past a bank sign along a road in New Delhi, India, 25 November, 2015.Reuters

The Credit Information Bureau Ltd (CIBIL) has identified over 5,600 borrowers as wilful defaulters, who owe their lender banks Rs 60,000 crore¸ Financial Express reported. The banks have labelled their borrowers as wilful defaulters as soon as the civil suit was filed against them for defaulting.

As on Dec. 31, 2016, State Bank of India (SBI) and Punjab National Bank (PNB) emerged as the top two lenders with the highest value of loans wilfully defaulted. Both public sector banks had wilful-defaulted loans to the tune of Rs 12,091 and Rs 9,445 crore, respectively, reported the daily.

PNB has filed suit against 698 borrowers, said FE. It added if non-suit filed defaulters are also considered, then nearly a third of its non-performing assets valued at Rs 34,338 crore could have resulted in willful default.

Amongst the private sector banks, Kotak Mahindra Bank had the largest amount owed by wilful defaulters. With receivables worth Rs 5,442 crore, it had more than half the willfully defaulted loans of the private sector collectively.

The private sector banks' amount with willful defaulters stood at Rs 10,250 crore, while the foreign banks' share was Rs 463 crore, reported FE.

"...Forget the ethics of it or the morality of it. Any market system can only be successful if those who make mistakes are made to pay for them," Business Standard quoted Arvind Subramaninan, the chief economic advisor to the finance minister, as commenting on wilful defaulters' plushy lives in an interview to NDTV's Walk the Talk programme.

Subramanian added that the proposed bankruptcy and insolvency bills mooted in Parliament are instruments to address this looming issue, among others.

The Reserve Bank of India guidelines define a wilful defaulter as a borrower who indulges in deliberate non-payment of dues despite adequate cash flow and good net worth. Or even borrowers who have not utilised the money raised from the lender for the specific objective it was intended to and has instead diverted the availed loan to other concerns, interpreted the FE.

[1 lakh = 100,000 | 1 crore = 10 million | 100 crore = 1 billion]