Banks wrote off Rs 14.56 lakh crore NPAs since 2014-15; Rs 2.09 wiped out in FY23

On Monday, the Parliament was informed that banks have written off bad loans worth Rs 14.56 lakh crore in the last nine financial years, starting 2014-15. Of the total Rs 14,56,226 crore, written off loans of large industries and services stood at Rs 7,40,968 crore.

In a written reply to Lok Sabha, Minister of State for Finance Bhagwat Karad said that Scheduled Commercial Banks have recovered an aggregate amount of Rs 2,04,668 crore in written-off loans, including corporate loans, since April 2014 and up to March, 2023.

In another reply, the minister stated the net of recovery in written-off loans during the financial year (net write-off) in public sector banks (PSBs) was Rs 1.18 lakh crore in FY18, which declined to Rs 0.91 lakh crore in FY22 and to Rs 0.84 lakh crore (RBI provisional data) in FY23.

Net write-off loans by private sector bank was Rs. 73,803 crore (RBI provisional data) in FY 2022-23, he said further.

Net write-off as percentage of opening gross loans and advances in private sector banks was 1.25 per cent and 1.57 per cent in FY 2017-18 and FY 2022-23 respectively, and it was 2 per cent and 1.12 per cent for PSBs during the same period.

During the year ended March 2023, banks wrote off non-performing assets (NPAs), or bad loans, worth over Rs 2.09 lakh crore, as per Reserve Bank of India.

A loan is classified as an NPA when the repayment of the principal amount or the interest remains outstanding for a period of 90 days.

Comprehensive steps have been taken by the government and RBI to recover and to bring down NPAs, enabled by which, gross NPAs of PSBs have declined to Rs 4.28 lakh crore as on March 31, 2023 from Rs 8.96 lakh crore as on March 31, 2018, Karad added.

Elaborating further, he said, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, has been amended to make it more effective.

The Minister further added that the pecuniary jurisdiction of debt recovery tribunals (DRTs) was increased from Rs 10 lakh to Rs 20 lakh to enable the DRTs to focus on high-value cases, resulting in higher recovery for the banks and financial institutions. Wilful defaulters and companies with wilful defaulters as promoters/directors have been debarred from accessing capital markets to raise funds.

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