Loans worth Rs. 81,683 crore were written-off by public sector banks (PSBs) in 2016-17, Finance Minister Arun Jaitley said today in the Rajya Sabha.
In a written reply, Jaitley said that writing-off of loans is done for tax benefit as well as capital optimisation and borrowers of such loans continue to be liable for repayment.
The amount written off (including through compromise) by PSBs was Rs. 81,683 crore in the financial year 2016-17, including Rs. 20,339 crore by the State Bank of India (as per RBI data on global operations), he said.
The amount written off by nationalised banks was Rs. 28,781 crore during 2017-18 (up to September, 2017).
As per the Reserve Bank of India (RBI) guidelines and policy approved by Bank Boards, non-performing loans, 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.
During the ongoing fiscal, up to September, 2017, the amount written off by PSBs was Rs 28,781 crore, he added. As per the Reserve Bank of India (RBI) guidelines and the policy approved by bank boards, non-performing assets (NPAs), or bad loans, including those for which full provisioning has been made on completion of four years, are removed from the bank balance-sheet by way of write-off.
The recovery of dues takes place on ongoing basis under legal mechanisms, including the Secularisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, Debts Recovery Tribunals and Lok Adalats, Jaitley added. In another reply to the Rajya Sabha, Minister of State for Finance Shiv Pratap Shukla said in the five financial years since April 1, 2013, banks have reported 13,643 cases of fraud involving a total amount of Rs 52,717 crore.
The Minister’s statement follows the unveiling last month of the Rs 12,600-crore fraud on state-run Punjab National Bank by accused diamantaire Nirav Modi and his uncle Mehul Choksi of Gitanjali Group.