The Crossbill News Desk
Minister of State for Finance Pankaj Chaudhary on Tuesday (August 6) informed the Rajya Sabha in a written reply that banks have written off loans totalling Rs 9.90 lakh crore, in the last five financial years.
In the last fiscal year, 2023-24, banks wrote off loans amounting to Rs 1.70 lakh crore, compared to Rs 2.08 lakh crore in the previous fiscal year, news agency PTI reported.
The highest write-off occurred in 2019-20, totalling Rs 2.34 lakh crore. This amount decreased to Rs 2.02 lakh crore the following year and further reduced to Rs 1.74 lakh crore in 2021-22.
According to RBI guidelines and policies approved by banks' boards, Non-Performing Assets (NPAs) are removed from a bank's balance sheet through a write-off after full provisioning has been made and the assets have been non-performing for four years, the minister informed.
In a reply to a question asked by Congress member Randeep Singh Surjewala, Chaudhary said, “Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimise capital, in accordance with the said guidelines and policies of the respective boards,” PTI quoted him saying.
Chaudhary said that such write-offs do not cancel the borrowers' obligation to repay their debts, and therefore, do not benefit the borrowers in terms of reducing their liabilities. Borrowers with written-off loans remain liable for repayment, and banks continue to pursue recovery through various available mechanisms for these accounts.
Out of the Rs 9.9 lakh crore written off over the past five years, recoveries amounted to Rs 1.84 lakh crore, or just 18 percent of the total write-offs. According to Reserve Bank of India (RBI) data, the gross Non-Performing Assets (GNPA) for Scheduled Commercial Banks (SCBs) were Rs 8,96,082 crore (GNPA ratio of 8.21 percent) as of March 31, 2020, Rs 8,35,051 crore (GNPA ratio of 7.33 percent) as of March 31, 2021, and Rs 7,42,397 crore (GNPA ratio of 5.82 percent) as of March 31, 2022.
The GNPA further decreased to Rs 5,71,544 crore (GNPA ratio of 3.87 percent) as of March 31, 2023, and to Rs 4,80,687 crore (GNPA ratio of 2.75 percent) as of March 31, 2024, based on provisional data.
Chaudhary added that it indicates that gross NPAs in Scheduled Commercial Banks (SCBs) have been declining over the past five years, PTI reported.
In the last fiscal year, 2023-24, banks wrote off loans amounting to Rs 1.70 lakh crore, compared to Rs 2.08 lakh crore in the previous fiscal year, news agency PTI reported.
The highest write-off occurred in 2019-20, totalling Rs 2.34 lakh crore. This amount decreased to Rs 2.02 lakh crore the following year and further reduced to Rs 1.74 lakh crore in 2021-22.
According to RBI guidelines and policies approved by banks' boards, Non-Performing Assets (NPAs) are removed from a bank's balance sheet through a write-off after full provisioning has been made and the assets have been non-performing for four years, the minister informed.
In a reply to a question asked by Congress member Randeep Singh Surjewala, Chaudhary said, “Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimise capital, in accordance with the said guidelines and policies of the respective boards,” PTI quoted him saying.
Chaudhary said that such write-offs do not cancel the borrowers' obligation to repay their debts, and therefore, do not benefit the borrowers in terms of reducing their liabilities. Borrowers with written-off loans remain liable for repayment, and banks continue to pursue recovery through various available mechanisms for these accounts.
Out of the Rs 9.9 lakh crore written off over the past five years, recoveries amounted to Rs 1.84 lakh crore, or just 18 percent of the total write-offs. According to Reserve Bank of India (RBI) data, the gross Non-Performing Assets (GNPA) for Scheduled Commercial Banks (SCBs) were Rs 8,96,082 crore (GNPA ratio of 8.21 percent) as of March 31, 2020, Rs 8,35,051 crore (GNPA ratio of 7.33 percent) as of March 31, 2021, and Rs 7,42,397 crore (GNPA ratio of 5.82 percent) as of March 31, 2022.
The GNPA further decreased to Rs 5,71,544 crore (GNPA ratio of 3.87 percent) as of March 31, 2023, and to Rs 4,80,687 crore (GNPA ratio of 2.75 percent) as of March 31, 2024, based on provisional data.
Chaudhary added that it indicates that gross NPAs in Scheduled Commercial Banks (SCBs) have been declining over the past five years, PTI reported.
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