Minister of State for Finance & Corporate Affairs Anurag Singh Thakur informed the Lok Sabha on Tuesday that gross non-productive assets (NPAs) of the state-owned banks have reduced by Rs 1.06 lakh crore in the last fiscal.
This decline comes on the heels of an over 33 per cent jump (year-on-year) in bad loans posted in FY18. Moreover, as per RBI data, a record recovery of Rs 3.09 lakh crore has been posted by the public sector banks (PSBs) over the last four financial years, not including the recovery in IDBI Bank in the last fiscal. In the last fiscal alone, Rs. 86,013 crore was recovered.
Significantly, as per inputs received from these lenders, FIRs have been filed against 3,154 wilful defaulters at the end of FY19. Wilful defaulters is an umbrella term used for someone who has not repaid his debt when he can do so or has essentially not used funds for the purpose it had been borrowed for or has disposed of the assets pledged for a loan without the bank's knowledge. In fact, diversion of funds for purposes other than those stated is also considered grounds for being declared a wilful defaulter.
In his written reply to Parliament on NPAs written-off by the PSBs, Thakur also pointed out that resolution plans have been approved in 68 cases by the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code till end-March. "The total resolution amount approved in these cases was Rs 65,320 crore. Provision held by PSBs in these cases was Rs 33,556 crore as on March 31," the Ministry of Finance said in a statement.
The PSBs themselves provided for an additional amount of Rs 21,727 crore or around 18 per cent of the principal outstanding in these accounts.
However, the recovery of bad loans in the PSBs has been much faster than the total write-offs during 2018-19. Finance Minister Nirmala Sitharaman informed the Parliament last month that the write-offs of these banks stood at Rs 36,377 crore during the year.
(With PTI inputs)