Is defaulting Bank loans a criminal issue as well ?

Is defaulting Bank loans a criminal issue as well ? This would be the topic in the coming days as Canara Bank has filed a criminal complaint to the CBI against Deccan Chronicle Holdings (DCHL).

Briefly, for the benefit of those who are new to this weird  loan saga, more weird than the Kingfisher loan drama, and as weird as it can get on our long beach city: any body who was in the business of lending bent over backwards to be a lender to DHCL.  DHCL obliged them smilingly pocketing who ever was prepared to lend them, and perhaps dipped its hands into pockets of those where were not very obliging. The end effect is that a group of 24 lenders have ended up with an  exposure of around R4,300 crore to DCHL.

The break up of Bank’s exposure is even more stunning.  As per sketchy information available in the media, the exposures are as follows: ICICI Bank Rs 490 crore, Axis Bank Rs. 400 crore, Canara Bank Rs. 330 crore, Andhra Bank Rs. 200 crore, Yes Bank Rs. 175 crore, IndusInd Bank Rs. 100 crore, Kotak Mahindra Bank Rs. 100 crore, Indian Overseas Bank Rs. 74 crore and Corporation Bank Rs. 100 crore.  And apparently some banks are keeping their exposure a secrete because it may result in some egg muck on their face.

What is even more intriguing is that some Non Banking Finance Companies too seem to have fallen into the rate race trap. Look at the figures  as appeared in the media and not denied by the respective NBFCs,  lawyers for workers comp.  Will banks now file a criminal case in case of every loan default?  Lets wait and see.