China’s Supreme People’s Court has blacklisted 6.73 million bank defaulters and restricted them from travelling by plane, getting promoted or applying for loans and credit cards.
The Supreme People’s Court’s deterrent has already proven to be effective with nearly 1 million defaulters voluntarily fulfilling the court’s orders. Credit: Reuters
New Delhi: Even as India is reeling from various bank frauds coming to light and the loan defaulters – such as Nirav Modi for the alleged Rs 11,400-crore involving Punjab National Bank (PNB) and Vijay Mallya of Kingfisher fame – packing their bags and fleeing abroad, China has taken strict measures to ensure the same doesn’t happen.
In a massive crackdown, China’s Supreme People’s Court (SPC) has blacklisted 6.73 million bank defaulters and restricted them from travelling by plane, applying for loans and credit cards or getting promoted, reported Reuters.
According to Global Times, “6.15 million people who defaulted have been restricted from purchasing plane tickets and 2.22 million barred from travelling by high-speed train, which are usually more expensive”.
To ensure that there is no way such defaulters are allowed to travel easily, Meng Xiang, the chief of the SPC’s enforcement bureau, told Global Times that the SPC has cooperated with airlines and railway companies from December 2017 onwards to bar those who default from purchasing tickets, based on ID card information and their passports.
More so, 71,000 defaulters have been barred from serving as corporate representatives and executives and from getting promotions. As per the Global Times report, Meng further stated that the court’s list of blacklisted defaulters include government staff, members of local legislative and political advisory bodies, and Communist Party of China delegates. A few have also been hit with expulsions or demotions.
As of now, 550,000 loan and credit card applications from defaulters have been barred by the Industrial and Commercial Bank of China, the largest bank in the world.
India lags far behind
Though the Reserve Bank of India is yet to release a full list of defaulters, the Indian Express reported this week that Indian banks have reported wilful defaults of over Rs 1,11,738 crore involving 9,339 borrowers who have the capacity to pay up but refuse to repay loans.
“This is a 340% surge in less than five years as total wilful defaults were just Rs 25,410 crore in 2013,” reported the Indian Express.
According to the latest data from the Credit Information Bureau of India Ltd (CIBIL), PNB has wilful defaults of Rs 12,574 crore involving 1,018 borrowers as of December 2017. The major defaulters are Winsome Diamond (Rs 899 crore), Nafed (Rs 224 crore) and Apple Industries (Rs 248 crore).
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State Bank of India (SBI) leads the list with wilful defaults of Rs 27,716 crore by 1,665 borrowers. Major wilful defaulters of SBI include Kingfisher Airlines (Rs 1,286 crore), Calyx Chemicals (Rs 327 crore), J B Diamond (Rs 208 crore), Spanco Rs 347 crore), Zenith Birla (Rs 139 crore), Shreem Corp (Rs 283 crore), Zoom Developers (Rs 378 crore), First Leasing (Rs 403 crore) and GET Engineering (Rs 406 crore), according to the Indian Express.
India made some noises in 2017 when finance minister Arun Jaitley brightly declared that “India takes the issue of defaulters very seriously“.
“It is obvious that because of this strong position the government has taken, that some defaulters are on the run. Being on the run, they find refuge in certain other jurisdictions, exploiting the systems in other parts of the world,” the minister said.
He said Indian investigating agencies are utilising every provision of the law available to them to recover amounts and attach assets in India to “get these people back and held responsible as per law”, before going on to narrate that UK’s democracy was “liberal enough to permit defaulters to stay here”.
But even if the UK is willing to go easy on allowing defaulters to settle there, the finance minister would do well to remember the proof of the pudding lies in the biting, China style.