New Delhi: UCO Bank has declared industrialist Yash Birla a wilful defaulter, said reports on Monday. This comes in the wake of the Birla Group failing to repay Rs 67.65 crore it owed to the bank despite several reminders. Also Read - Liquidity in Economy is Not a Problem, Says UCO Bank Chief
The money was owed by Birla Surya involved in the manufacture of solar power equipment. Birla Surya had borrowed the money for the manufacture of multi-crystalline solar photovoltaic cells. The bank said that the company had a credit of Rs 100 crore, of which Rs 67 crore plus interest rate was due. The bank had termed the loan a non-performing asset (NPA) on June 3, 2013. Also Read - PSU Firms, Banks Taking All Precautions to Ward Off COVID-19: Officials
As per RBI guidelines, wilful defaulters cannot avail any other facilities and their unit cannot float new ventures or business for five years. The lenders may also initiate criminal proceedings against the defaulter. Also Read - Bengaluru: Fire Breaks Out in UCO Bank Building at MG Road, Many Feared Trapped
According to the guidelines, a borrower can be declared a ‘wilful defaulter’ when s/he fails to pay his debts due to his own actions. This could include not paying despite having resources, diverting funds to other activities, or even selling assets without informing.
The Yash Birla Group has over a dozen companies, including Zenith Steel, Birla Lifestyle and Shola Infotech. Most of these have claimed they aren’t in a position to repay creditors. Last year, as many as three companies of the group – Birla Cotsyn, Birla Shloka Edutech and Zenith Birla – came under investigation for diversion of funds.
Meanwhile, UCO Bank has also been reporting losses for 14 quarters and its gross NPA is pegged at Rs 29,888 crore.