Banks wrote off loans of ₹ 10,09,511 cr in 5 years: Govt. | Popgen Tech


The government on Monday informed the Lok Sabha that scheduled commercial banks have written off loans amounting to more than 10.09 lakh crore in the last five financial years and the process of recovery of dues from the borrower continues.

Union Finance Minister Nirmala Sitharaman said that recovery in NPA (non-performing asset) accounts, including written off loans, was an ongoing process.

According to Reserve Bank of India (RBI) data, public sector banks have recovered 4,80,111 crore, inclusive 1,03,045 crore from written-off loans, during the last five financial years, it said.

“According to the inputs received from the RBI, the scheduled commercial banks have written off an amount of 10,09,511 crore during the last five financial years,” Sitharaman said during the Question.

State Bank of India, the country’s largest lender, leads the list with the biggest write-offs at 2.04 trillion rupees, the finance ministry said in a written reply to a question asked in the lower house of -parliament on Monday.

Punjab National Bank, another state-owned lender, ranked second with a cumulative amount of 923.39 billion rupees in write-offs. Two other public sector banks, Oriental Bank of Commerce and United Bank of India, were merged into PNB in ​​April 2020.

Banks continue to pursue recovery actions initiated in canceled accounts through various recovery mechanisms available, Union FM Sitharaman said.

The borrower of the canceled loan continues to be responsible for repayment and the process of recovering rights from the borrower in the canceled loan accounts continues, she added.

The actions include the filing of a case in the civil courts or in the Debt Recovery Tribunals, action under the Act on the Securitization and Reconstruction of Financial Assets and the Enforcement of Interest of -Sigurtà, 2002, the filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement and compromise and sale of NPAs.

“Therefore, the write-off does not benefit the borrower,” she said.

The Minister said that according to the RBI guidelines and policy approved by the banks’ boards, the NPAs, including those in respect of which a full provision had been made at the completion of four years, were removed from the balance sheet of the concerned bank by way of deletion. .

The banks evaluate and consider the impact of the write-off as part of their regular exercise to clean up their balance sheet, make use of the tax benefit and optimize capital, according to the guidelines and the RBI policies approved by their boards, she said.

Responding to a question, Sitharaman said that the process to recover money of small depositors and investors from defaulters was very complicated as the legal process was long and there were many claimants for the seized assets that were include banks and other financial institutions.

The Minister said that she was aware of the depositors going through extreme difficulties and there was a need to look at the matter and how to simplify the process.

Earlier, Minister of State for Finance Bhagwat Kishanrao Karad said that the names of the loan defaulters were not disclosed due to RBI guidelines but their names may be disclosed once the their assets are put up for auction.

(with inputs from agencies)

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