English
New Delhi: According to the data submitted by the government of India in the Parliament, country’s scheduled commercial banks (SCBs) have written off loans worth Rs 10,09,511 crore during the last five financial years. Simply put, a bank writes off a loan when it finds no way to recover the money, and it just wants to simply take the bad asset off its balance sheets.
Union Finance Minister Nirmala Sitharaman, while replying to a question in the Parliament, has asserted that the 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.
“The banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available,” Sitharaman said.
At the same time, public sector banks could recover only Rs 1,03045 crore from written-off loans from the last five financial years, Sitharaman said citing RBI data. The aggregate recovery in the last five years amounts to Rs. 4,80,111 crore, the minister said.
India’s largest lender, State Bank of India (SBI), wrote off Rs 2 lakh crore worth loans in the last five financial years, while Punjab National Bank (PNB) wrote off loans worth Rs 67,214 crore loans in last four fiscal years, followed by IDBI Bank which wrote off Rs 45650 crores of loans. Among private sector banks, ICICI Bank wrote off Rs 50,514 crores of loans while HDFC Bank wrote off Rs 34,782 crore loans.
Loan write offs have significantly contributed to the decline in bank NPAs over years. According to the Reserve Bank of India (RBI) financial stability report for June 2022, the gross non-performing asset (NPA) ratio of banks fell to six-year low of 5.9 percent in March 2022. The net non-performing assets (NNPA) ratio fell to 1.7 percent in March 2022.
For breaking news and live news updates, like us on Facebook or follow us on Twitter and Instagram. Read more on Latest Business News on India.com.
