From diamond merchant Mehul Choksi’s Rs 8,048 crore to flamboyant tycoon Vijay Mallya’s Rs 1,943 crore, India’s banking system has in recent years suffered massive blows on account of wilful defaulters, or borrower who do not repay despite having the capacity to do so.

Yet, state-owned banks in the country continue to put up a poor show when it comes to recovering their money.

Over the last three years, state-owned banks in India have recovered just Rs 10,107 crore from wilful defaulters, according to a reply filed by the minister of state for finance Anurag Thakur in the upper house of Indian Parliament on September 20.

This is worrisome given the top 50 wilful defaulters in India had together robbed banks in the country of around Rs 68,000 crore until September 2019.

What is even more worrying is that the government-owned banks have the worst track record when it comes to making recoveries.

The bad loans of public sector banks have surged from Rs 2.8 lakh crore in March 2015 to Rs 7.2 lakh crore in March 2020, as per the latest data available.

The bad loans of state-owned banks since 2015

Banks Mar-15 Mar-16
Mar-17 Mar-18 Mar-19 Mar-20
Allahabad Bank Rs 8,358 crore Rs 15,385 crore Rs 20,688 crore Rs 26,563 crore Rs 28,705 crore Rs 32,150 crore
Andhra Bank Rs 6,877 crore Rs 11,444 crore Rs17,670 crore Rs28,124 crore Rs 28,974 crore Rs 30,951 crore
Bank of Baroda (BoB) Rs 16,261 crore Rs 40,521 crore Rs42,719 crore Rs56,480 crore  Rs 48,233 crore Rs 73,140 crore
Bank of India Rs 22,807 crore Rs 49,879 crore Rs 52,045 crore Rs 62,328 crore Rs 60,661 crore Rs 61,730 crore
Bank of Maharashtra Rs 6,402 crore Rs 10,386 crore Rs 17,189 crore Rs 18,433 crore Rs 15,324 crore Rs 15,746 crore
Canara Bank Rs 13,040 crore Rs 31,638 crore Rs 34,202 crore Rs 47,468 crore Rs 39,224 crore Rs 36,645 crore
Central Bank of India Rs 11,873 crore Rs 22,721 crore Rs 27,251 crore Rs 38,131 crore Rs 32,356 crore Rs 33,259 crore
Corporation Bank Rs 7,107 crore Rs 14,544 crore Rs 17,045 crore Rs 22,213 crore Rs 20,724 crore Rs 19,557 crore
IDBI Bank Limited# Rs 12,685 crore Rs 24,875 crore Rs 44,753 crore Rs 55,588 crore
Indian Bank Rs 5,670 crore Rs 8,827 crore Rs 9,865 crore Rs 11,990 crore Rs 13,353 crore Rs13,862 crore
Indian Overseas Bank Rs 14,922 crore Rs 30,049 crore Rs 35,098 crore Rs 38,180 crore Rs 33,398 crore Rs23,734 crore
Oriental Bank of Commerce Rs 7,666 crore Rs 14,702 crore Rs 22,859 crore Rs 26,134 crore Rs 21,717 crore Rs21,634 crore
Punjab and Sind Bank Rs 3,082 crore Rs 4,229 crore Rs 6,298 crore Rs 7,802 crore Rs 8,606 crore Rs8,923 crore
Punjab National Bank Rs 25,695 crore Rs 55,818 crore Rs 55,370 crore Rs 86,620 crore Rs 78,473 crore Rs 76,809 crore
State Bank of India (SBI) Rs 56,738 crore Rs 98,185 crore Rs112,343 crore Rs223,427 crore Rs172,750 crore Rs159,661 crore
Syndicate Bank Rs 6,442 crore Rs 13,832 crore Rs 17,609 crore Rs 25,759 crore Rs 24,680 crore Rs 25,330 crore
UCO Bank Rs 10,186 crore Rs 20,908 crore Rs 22,541 crore Rs 30,550 crore Rs 29,888 crore Rs 22,140 crore
Union Bank of India Rs 13,031 crore Rs 24,171 crore Rs 33,712 crore Rs 49,370 crore Rs 48,729 crore Rs 49,924 crore
United Bank of India Rs 6,553 crore Rs 9,471 crore Rs 10,952 crore Rs 16,552 crore Rs 12,053 crore Rs 11,457 crore
Credit: Quartz. Data: RBI and PSBs

Absconding defaulters, legal wrangle, and lack of investor interest are some of the reasons for the low recoveries.

The implementation of the Insolvency and Bankruptcy Code in 2017 has reduced the time taken for the resolution of bad loans to 340 days on an average compared to 4.3 years earlier. Yet, a deeper look at the numbers reveals banks’ bid to recover money from defaulters is still getting hampered.

Bank bad loan recoveries

The realisations or recovery rate, which means the amount of money which lenders received in comparison to what they had claimed in the court, has dropped sharply as big-ticket cases have reached a resolution and Covid-19 slump worsens.

Lenders are struggling to recover money in small and mid-sized cases as there is a lack of interest from investors.

The recovery process slowed down during the April-June period, in fact, due to the Covid-19 outbreak, according to IBC data examined by CARE Ratings.

In the June quarter, the number of new cases admitted in the National Company Law Tribunal declined by 75% year-on-year. The CARE report also states that the recovery rate in the June quarter (when the lockdown was in place) stood at 30.2%, which is way lower than 64% in the previous quarter. “This can be attributed to the nation-wide lockdown coupled with (the) suspension of (the) fresh bankruptcy proceeding for Covid-19 defaults,” CARE said.

At the same time, the economic decline triggered by Covid-19 is leading to a lack of investor interest and deferment of payments, as per ICRA Ratings.

Credit: Quartz. Data: IBBI, CARE Ratings

These numbers put together reveal that lenders are still struggling to recover money from fraudsters.

This article first appeared on Quartz.