India’s banking sector continues to grapple with the mounting burden of unpaid dues from major economic offenders who fled the country to evade prosecution. As per the latest disclosure in Parliament, nine prominent Fugitive Economic Offenders (FEOs) collectively owe Indian banks ₹58,082 crore, including ₹26,645 crore in principal and ₹31,437 crore in interest. Against this, banks have so far managed to recover only about ₹19,000 crore, roughly 33% of the total amount due.
The Ministry of Finance informed Parliament this week that 15 individuals had been officially designated as FEOs as of October 31, 2025. Among them, nine are involved in high-value financial frauds, and details regarding their loan exposure and recoveries have now been made public.
SBI Bears the Highest Exposure but Leads in Recoveries
The State Bank of India (SBI) has recorded the highest exposure to these offenders. Together, the nine FEOs owe SBI over ₹22,000 crore. Next in line are Punjab National Bank (PNB) and Bank of India (BOI), both of which have also faced substantial losses due to large-scale defaults.
However, SBI’s recovery performance stands out. The bank has managed to recover close to 52% of its total exposure in these cases, significantly higher than any other lender in the group. Analysts attribute this achievement largely to the successful asset liquidation and recovery efforts in the Vijay Mallya case, where SBI led the consortium of lenders.
In contrast, recovery rates for other banks remain below 40%, highlighting the continuing stress on India’s public sector banking system and the challenges in securing repayment once borrowers flee the jurisdiction.
Vijay Mallya Tops the Defaulter List
When ranked by total dues (principal plus interest), Vijay Mallya remains the largest offender, with a cumulative liability of nearly ₹27,000 crore. Remarkably, over 56% of the amount owed in his accounts has already been recovered making it the highest recovery rate among all listed FEOs.
The Sandesara family linked to the Sterling Group holds the second position in terms of total exposure. However, their recovery rate stands at around 17%, far behind that of Mallya.
Meanwhile, Nirav Modi, implicated in one of India’s largest bank frauds, has seen only 7% recovery to date, the lowest among the major offenders.
Divergent Exposure Patterns Across Key Cases
FEO cases reveal distinctly different exposure and recovery patterns across banks:
- Vijay Mallya: SBI had the largest exposure to Mallya, with several other banks including BOI and PNB forming part of the consortium. Strong coordination and aggressive recovery action helped the consortium secure significant dues
- Sandesara Family (Sterling Group): Loans to the Sandesara family were spread across multiple lenders, complicating the recovery process. Numerous legal disputes and cross-border investigations have slowed progress considerably.
- Nirav Modi: The PNB bore the maximum exposure in the Nirav Modi LoU scam, which inflicted substantial losses on the bank. International litigation and ongoing extradition-related complexities continue to delay recovery efforts.
Contribution of OTS and Legal Mechanisms
The parliamentary data includes details of two FEOs who settled part of their dues under One Time Settlement (OTS) with banks. Additionally, figures for the Sandesara family represent exposure to three individualsNitin J. Sandesara, Chetan J. Sandesara, and Dipti C. Sandesara as listed in official documents.
FEO Act: Progress and Persistent Challenges
The Fugitive Economic Offenders Act was enacted to deter major economic offenders from absconding and to facilitate swift confiscation of their properties. However, experts note that: International legal processes remain slow and complex, Asset identification and liquidation often take years, Extradition cases face diplomatic and procedural hurdles.
Despite these challenges, the progress in key recoveries and the government’s continued focus on accountability indicate a stronger coordination between enforcement agencies and banks to safeguard the financial system.
