Central Bank Faces ₹1.44 Lakh Crore Bad Loans, Initiates 4,903 Recovery Cases

The Central Bank of India is handling loan defaults of ₹1.44 lakh crore by big corporate borrowers. This points to persistent stress in books in the legacy loans of state sector banks.

The bank has recorded 4,903 recovery cases across the country as of January 2026 to counter such defaults. The wider public sector undertaking (PSU) banking system is under pressure with huge corporate defaults of over ₹29 lakh crore.

Who Are The Major Defaulters?

The bank’s exposure is spread across multiple large corporate accounts, many of which are under insolvency or investigation. Here are the key defaulters:

Other key defaulters include:

• Videocon Group is one of the largest defaulters with dues of ₹25,299 crore. Promoted by Venugopal Dhoot and Rajkumar Dhoot, the group availed itself nine loans from the bank and is currently under insolvency. It is also being investigated by the Central Bureau of Investigation (CBI) in an alleged bribery case involving former Chanda Kochhar.

• Reliance Communications, Reliance Naval Engineering, and Reliance Telecom together account for ₹4,402 crore in defaults. The Anil Ambani-led group entities have been under prolonged financial stress and are undergoing a resolution process.

• Dunn Foods Pvt Ltd has defaulted on ₹4,191 crore.

• Punj Lloyd has outstanding dues of ₹4,055 crore.

• Coastal Energen Pvt Ltd has defaulted on ₹3,630 crore. Adani Power has taken over the company under the insolvency process. The company had strong multi-bank exposure with Punjab National Bank, Indian Overseas Bank, Indian Bank, UCO Bank, HUDCO, IFCI, and Bank of India. The company also borrowed 10,605 crore loan from SBI, and the lenders are seeking to recover their money through legal means.

• Lanco Infratech, Rolta India, and S Kumars Nationwide together account for significant defaults of ₹3,543 crore, ₹3,422 crore, and ₹3,146 crore, respectively.

• Gitanjali Gems has defaulted on ₹2,815 crore. The company is linked to a major banking fraud case involving fugitive promoters, namely Mehul Choksi and Nirav Modi.

• KS Oils, Shri Lakshmi Cotsyn, Frost International, Nagarjuna Oil Corporation, and EPC Constructions (Essar-linked) together account for defaults of ₹2,746 crore, ₹2,315 crore, ₹2,138 crore, ₹2,117 crore, and ₹2,087 crore, respectively.

• Sujana Towers has defaulted on ₹1,925 crore.

• Housing Development and Infrastructure Ltd (HDIL) has dues of ₹1,464 crore.

• Pioneer Gas and Power has defaulted on ₹1,435 crores.

• Ushdev International has outstanding dues of ₹1,403 crore.

• Winsome Diamonds and Jewellery owes around ₹1,400 crore and is associated with the fugitive diamond promoter, Jatin Mehta.

• Together, Transtroy India, Lloyds Steel Industries, Forever Precious Diamonds, Konaseema Gas Power, C&C Construction, Shrenuj and Co., and Vandana Vidyut constitute defaults of ₹1,389 crore, ₹1,321 crore, ₹1,267 crore, ₹1,222 crore, ₹1,161 crore, ₹1,129 crore and ₹1,117 crore, respectively.

• Varun Industries and VVF (India) Ltd share huge unpaid debts, which are still being pursued.

• NAFED has defaulted on ₹663 crore.

• Siva Ventures (C. Sivasankaran) has dues of ₹525 crore.

• Other mid-sized defaulters in the ₹600–₹1,000 crore range include Rabirun Vinimoy, Nakoda Ltd, Surya Vinayak Industries, Unity Infra Projects, Spanco Ltd, EMC Ltd, and Sirpur Paper Mills.

What Is Driving The High Default Levels?

A large portion of these loans is linked to legacy corporate lending cycles, in which exposure was extended to capital-intensive sectors such as infrastructure, power, and telecom.

Many of these accounts now face:

• Insolvency proceedings.
• Limited collateral recovery.
• Legal disputes and investigations.

According to bankers, recoveries are also problematic, as they are not well supported by assets and take long periods to recover.

Also Read - SEBI Plans FPI Netting And A Fit Rule Shift After ₹71,746 Cr Outflows

What Does This Mean For Investors?

To the investors, the data points to the fact that legacy stresses still lingered on the balance sheets of the PSU banks, despite the fact that overall asset quality has improved in recent years.

While insolvency resolution and recovery efforts can potentially create long-term value, the high number of defaults suggests that recoveries will be slow and uneven in the short term. This could negatively impact both profitability and how efficiently capital is used.

Conversely, the initiation of 4,903 recovery cases indicates a more proactive and structured approach to managing non-performing loans. To assess the extent of remediation concerning this historical financial strain, investors must closely observe recovery results, provisioning patterns, and the emergence of new slippages.

Source:

The Pioneer