Punjab National Bank (PNB) tops the list in a data report which shows that gems and diamond traders have cost banks over Rs 5,000 crore through 90 defaults.
The Federation of Bank of India Staff Unions (FBISU) compiled data, accessed by The Times of India, shows that PNB, due to nine defaulters, has lost Rs 1,790 crore.
Even though the data shows that State Bank of India (SBI) has the most number of defaulters - 15 - the loss incurred by them was Rs 410 crore, still lower than PNB.
PNB saga: Track all the latest updates and news here.
Among other banks, Union Bank of India and Oriental Bank of Commerce also come on top of the list, with nine and eight defaults, respectively.
According to the data, the total number of wilful defaulters is more than 5,000 and costing a total of around Rs 49,000 crore to all the banks. The latest Reserve Bank of India (RBI) data, however, shows that the defaulters have increased to 8,915 and the cost has jumped to Rs 92,376 crore.
Experts the newspaper spoke to said that the recent PNB fraud case can jump up the bank's cost and defaulters. "Given that this data doesn’t include the recent PNB scam, the final number could point to one of the worst frauds the sector has seen," a banker said.
Many loans - small or big - have not been repaid. In some cases, the banks are still under investigation. Firms such as Jatin Mehta's Winsome, among others, have defaulted many banks.
One of the reasons for how easily the jewel firms could trick banks, was by changing the names of their companies and borrowing.
The data shows that Beautiful Diamonds, another defaulter, was earlier called Splendour Gems. Another firm, Ghanshyandas Gems and Jewels, later became "Ghanshyamdas".
Since diamond trade is highly cash dependent, it leads to be a source of major money laundering cases. "It may be conceivable that diamond merchants resorted to higher borrowing through Nostro accounts overseas to deal with the setbacks caused by constriction of the cash economy," experts told the newspaper.
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