Private as well as government banks have jointly written off bad loans worth Rs 80,893 crore till September quarter of the current fiscal, the government told Rajya Sabha on Tuesday. Replying to a question in the upper house, Minister of State for Finance Anurag Thakur also mentioned that these write-offs do not benefit the borrower.
"As per RBI data on global operations, Public Sector and Private Sector Banks wrote-off Rs 80,893 crore (provisional data), during the current financial year 2019-20 (till September 30, 2019)," Thakur said in his response.
"As 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, write-off does not benefit the borrower," he stated.
Non-performing loans (NPAs), including those in respect of which full provisioning has been made on completion of four years, are removed from the bank's balance sheet by way of write-off. Banks evaluate the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their boards. As per RBI data, State Bank of India registered the biggest reduction in NPAs due to write-offs during the April-September 2019 period at Rs 27,535.31 crore.
Thakur stated that gross NPAs of public and private sector banks, as per RBI data on global operations, rose from Rs. 3.13 lakh crore as on March 31, 2015, to Rs 10.21 lakh crore as on March 31, 2018. Due to government's efforts, gross NPAs have declined to Rs 9.41 lakh crore as on September 30, 2019.
In response to a different question, Thakur revealed that public sector banks had written off bad loans worth Rs 47,658 crore, Rs 56,847 crore, Rs 79,048 crore, Rs 1,24,275 crore and Rs 1,86,632 crore during financial years 2014-15, 2015-16, 2016-17, 2017-18 and 2018-19, respectively. "Of these, write-off in loans pertaining to "Agriculture and allied activities" was Rs 2,833 crore, Rs 6,361 crore, Rs 7,091 crore, Rs 10,345 crore and Rs 12,556 crore respectively," Thakur had said.