The Crossbill News Desk
Banks in India wrote off loans worth Rs 1.7 trillion in the financial year 2023-24 (FY24), however, the amount reflect a decline as compared to Rs 2.08 trillion written off in FY23.
This marks the lowest level of loan write-offs in the past five years, according to data shared by Pankaj Chaudhary, Union Minister of State for Finance, in response to a query in the Lok Sabha, Business Standard reported.
Loan write-offs peaked at Rs 2.34 trillion in FY20 and subsequently dropped to Rs 2.03 trillion in FY21 and Rs 1.75 trillion in FY22. The continued reduction into FY24 suggests improved asset quality or stricter provisioning measures by banks.
Among public sector banks, Punjab National Bank recorded the highest write-offs at Rs 18,317 crore, followed by Union Bank of India at Rs 18,264 crore, and State Bank of India with Rs 16,161 crore.
Private sector banks also saw significant write-offs, led by HDFC Bank at Rs 11,030 crore, Axis Bank at Rs 8,346 crore, and ICICI Bank at Rs 6,198 crore.
Loan write-offs do not absolve borrowers of their repayment responsibilities. Minister Chaudhary clarified that the process, governed by Reserve Bank of India norms, is intended to clean up bank balance sheets by removing fully-provisioned non-performing assets (NPAs).
However, borrowers remain liable, and banks continue recovery efforts through legal and other mechanisms.
“Such write-offs do not result in the waiver of liabilities of borrowers and therefore, write-offs do not benefit the borrower. The borrowers continue to be liable for repayment, and banks continue to pursue recovery actions initiated in these accounts.” Chaudhary said.
Despite these measures, banks have struggled to recover dues. An RTI application revealed that over the past five years, banks managed to recover only 18.7% of the loans written off, leaving 81.3% unrecovered.
While FY24 saw an 18.2% reduction in overall loan write-offs by scheduled commercial banks, over one-fifth of these institutions reported an increase in the amount written off, according to a related The Indian Express report.
This marks the lowest level of loan write-offs in the past five years, according to data shared by Pankaj Chaudhary, Union Minister of State for Finance, in response to a query in the Lok Sabha, Business Standard reported.
Loan write-offs peaked at Rs 2.34 trillion in FY20 and subsequently dropped to Rs 2.03 trillion in FY21 and Rs 1.75 trillion in FY22. The continued reduction into FY24 suggests improved asset quality or stricter provisioning measures by banks.
Among public sector banks, Punjab National Bank recorded the highest write-offs at Rs 18,317 crore, followed by Union Bank of India at Rs 18,264 crore, and State Bank of India with Rs 16,161 crore.
Private sector banks also saw significant write-offs, led by HDFC Bank at Rs 11,030 crore, Axis Bank at Rs 8,346 crore, and ICICI Bank at Rs 6,198 crore.
Loan write-offs do not absolve borrowers of their repayment responsibilities. Minister Chaudhary clarified that the process, governed by Reserve Bank of India norms, is intended to clean up bank balance sheets by removing fully-provisioned non-performing assets (NPAs).
However, borrowers remain liable, and banks continue recovery efforts through legal and other mechanisms.
“Such write-offs do not result in the waiver of liabilities of borrowers and therefore, write-offs do not benefit the borrower. The borrowers continue to be liable for repayment, and banks continue to pursue recovery actions initiated in these accounts.” Chaudhary said.
Despite these measures, banks have struggled to recover dues. An RTI application revealed that over the past five years, banks managed to recover only 18.7% of the loans written off, leaving 81.3% unrecovered.
While FY24 saw an 18.2% reduction in overall loan write-offs by scheduled commercial banks, over one-fifth of these institutions reported an increase in the amount written off, according to a related The Indian Express report.
Comments (0)
Leave a Comment