Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Context
- The Ministry of Finance informed Parliament that 15 individuals have been declared Fugitive Economic Offenders (FEOs) as of October 31.
- Data shows nine major FEOs owe over ₹58,000 crore to Indian banks in principal and interest.
Scale of the Problem
- Total dues of nine FEOs: ₹58,082 crore (Principal: ₹26,645 crore; Interest: ₹31,437 crore).
- Banks have recovered over ₹19,000 crore, which is about 33% of total dues.
Bank-wise Exposure
- State Bank of India (SBI) has the highest exposure: over ₹22,000 crore.
- SBI also has the highest recovery rate (≈52%), primarily due to successful liquidation in Vijay Mallya’s case.
- Punjab National Bank (PNB) and Bank of India follow in exposure levels.
- For most other banks, recovery rates remain below 40%.
Top Fugitive Offenders and Dues
- Vijay Mallya
-
- Owes nearly ₹27,000 crore (principal + interest).
- Highest recovery among offenders: ≈56% recovered.
- SBI had maximum exposure to his accounts.
- Sandesara Family (Sterling Group)
- Second-highest dues.
- Recovery rate only ≈17%.
- Loan exposure spread across multiple banks.
- Nirav Modi
-
- Significant defaulter with extremely low recovery: ≈7%.
- Exposure largely borne by Punjab National Bank.
Key Insights from Data
- Interest accumulation (₹31,437 crore) exceeds the principal amount owed, reflecting long periods of non-repayment.
- Classifying offenders as FEOs has not ensured proportional recovery, especially in high-value frauds.
- Recovery performance varies sharply across banks despite similar legal tools.
- SBI’s relatively higher recovery demonstrates that early asset seizure and liquidation improve outcomes.
Conclusion
- FEOs continue to pose a major challenge to India’s financial system, with two-thirds of their dues still unrecovered.
- Strengthening cross-border cooperation, faster asset tracing, and coordinated bank action remain essential to improve recovery performance.