In The Past Five Financial Years, Banks Have Written Off Over Rs 10 Lakh Crore Bad Loans
India’s largest lender, the State Bank of India (SBI), wrote off Rs 1.65 lakh crore non-performing assets (NPAs) in the past five years.
According to the information submitted by Union Finance Minister Nirmala Sitharaman, in the Parliament on December 12, Punjab National Bank (PNB) had the second highest NPAs and wrote off Rs 59,807 crore during the same period.
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Bad loans written off by banks
SBI wrote off Rs 19,666 crore in loans in FY22, Rs 34,402 crore in FY21, Rs 52,362 crore in FY20 and Rs 58,905 crore in FY19.
IDBI Bank wrote off a total of Rs 33,135 crore during the last four years, with writing off Rs 2,889 crore in FY 22.
Among private sector banks, ICICI Bank wrote off Rs 42,164 crore and HDFC Bank wrote off Rs 31,516 crore loans.
NPAs, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off, she said in reply to Rajya Sabha.
BCCL
Written off, not waived off
“Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their boards. As per inputs received from RBI, Scheduled Commercial Banks (SCBs) wrote off an amount of Rs 10,09,511 crore during the last five financial years,” she said.
As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower, she said.
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Banks continue to recover written off loans
Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available, such as filing of a suit in civil courts or Debts Recovery Tribunals, filing of cases under the Insolvency and Bankruptcy Code, 2016 and through the sale of non-performing assets.
SCBs have recovered an aggregate amount of Rs 6,59,596 crore, including recovery of Rs 1,32,036 crore from written-off loan accounts during the last five financial years, she said.
Reuters
In cases where it is prima facie found that officials are responsible for the lapses of non-compliance with the laid down systems and procedures or misconduct or non-adherence to the due-diligence norms, action is initiated against the erring officials under the board-approved staff accountability policy, she said.
As per inputs from public sector banks, she said that staff accountability in respect of NPA cases has been fixed against 3,312 bank officials (of AGM and above rank) during the last five financial years, and suitable punitive actions have been taken commensurate to their lapses.
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