Mumbai: Kolkata-based lender UCO Bank on Sunday declared Yashovardhan Birla as a willful defaulter after Birla Surya Ltd failed to repay loans of ₹67.65 crore, the bank said in a public notice. The notice also carried a photo of the defaulter.
Yashovardhan Birla is the director of Birla Surya and also chairman of the Yash Birla Group, an industrial conglomerate. According to the notice, Birla Surya Ltd was sanctioned a credit limit of ₹100 crore for fund-based facilities for the purpose of manufacturing of multi-crystalline solar photovoltaic cells from UCO Bank’s corporate branch at Nariman Point, Mumbai.
The present balance outstanding is ₹67.65 crore plus unapplied interest from the date of turning into a non-performing asset (NPA), 3 June, 2013.
“Due to non-repayment of dues to the bank, the account was declared NPA on 3 June, 2013. The borrower has not repaid the dues owed to the bank despite several notices. The borrower company and its directors, promoters, guarantors were declared as willful defaulters by the bank and their name reported to the credit information companies for public information," UCO Bank said in its notice.
An email sent to Birla Surya Ltd remained unanswered. Meanwhile, the company is already under liquidation through the Bombay High Court’s official liquidator.
A borrower is tagged a willful defaulter if he/she has defaulted in meeting repayment obligations despite having the capacity to repay. Other instances include not utilizing the loan for the specific purpose for which it was availed of but was instead diverted for other purposes.
The Reserve Bank of India (RBI) has mandated banks to submit a list of suit-filed accounts and non-suit filed accounts of willful defaulters of ₹25 lakh and above on a monthly or more frequent basis to credit information companies like Cibil. However, identifying a willful default is not quite easy.
The evidence of willful default is examined by a committee headed by an executive director and two other senior officers of the rank of general manager or deputy general manager. If the committee concludes that willful default has occurred, it issues a showcause notice to the borrower and calls for their submissions and after considering their submissions, issues an order on willful default and the reasons.
The order of the committee is then reviewed by another committee headed by the chairman or managing director and chief executive officer and consisting, in addition, to two independent directors and the order shall become final only after it is confirmed by this review committee.