Canara Bank Chases ₹2.49 Lakh Crore in Corporate Defaults; Aircel, Jet Airways Among Top Defaulters

Canara Bank has emerged as one of the most exposed public sector lenders to large corporate defaults, with total dues of ₹2.49 lakh crore, according to data compiled by TransUnion CIBIL and reviewed by the Pioneer.

The bank ranks fourth among public sector banks in terms of large defaults, contributing to a broader system-wide stress where cumulative defaults across 11 PSU banks exceed ₹29 lakh crore. Notably, Indian Bank has not submitted its list of large defaulters for the past year.

High-Profile Borrowers Drive Exposure

A significant portion of Canara Bank’s stressed assets is linked to well-known corporate groups. The largest defaulter is Aircel, promoted by fugitive businessman C Sivasankaran, with dues of ₹4,508 crore.

Here is a list of other major stressed assets: 

Weak Collateral and Structuring Concerns

The data reveals structural issues in lending practices. In many cases, loans were backed primarily by personal guarantees or company shares, whose valuations later proved to be inflated.

Several borrowers have since entered insolvency or liquidation, limiting recovery prospects. In some instances, loans were fragmented into multiple smaller exposures. For example, Nicco Corporation received 168 separate loans of ₹16.75 crore each from a single branch, totalling ₹2,815 crore.

Recovery remains a challenge, with Canara Bank having filed 14,277 suits nationwide to reclaim dues.

Read more: RBI Explores AI-Based Facial Recognition for ATMs to Curb Fraud; Banks Flag Cost, Privacy Concerns.

Conclusion

Canara Bank’s large corporate default exposure reflects broader challenges in India’s banking sector, including legacy lending practices, weak collateral frameworks, and prolonged resolution cycles.

While recovery efforts are ongoing, the scale of stressed assets highlights the need for stronger credit appraisal, improved monitoring, and faster insolvency processes to safeguard financial stability.

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