Banks recovered Rs 7.15 lakh crore bad debts in five years: Govt
The government has again reassured parliament that banks are taking every step to recover written-off loans. Responding to a parliament question, Minister of state for Finance Dr Bhagwat Karad informed parliament that banks have recovered Rs 7.15 lakh crore in bad debts including those written off by the banks.
The Minister further said that 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.
“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 in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of non-performing assets,” said the minister.
The minister was responding to a question by Congress MP Manish Tewari. Mr Tewari had asked if the government has taken or proposes to take action to recover the lost amount of Rs. 12.10 lakh crore, which has been written off from the total gross bad debts of Rs. 67.66 lakh crore
The MoS Finance said that as per RBI guidelines and policy approved by bank Boards, 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.
“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 RBI guidelines and policy approved by their Boards. Such write-off does not result in waiver of liabilities of borrowers to repay,” Karad added.
He also informed parliament that gross bad debts of scheduled commercial banks have declined in the last five years from Rs. 10.36 lakh crore (gross NPA ratio of 11.18%) in March 2018 to Rs 5.72 lakh crore (gross NPA ratio of 3.87%) as on March 2023.
Also See: Public sector banks recovered Rs 1.03 lakh crore written-off loans in last five years
