Banks write off loans worth Rs 9.90 lakh cr in last 5 financial years
Banks have written off loans worth Rs 9.90 lakh crore in the last five financial years, Parliament was informed on Tuesday. During 2023-24, banks loan write off was at Rs 1.70 lakh crore, as against Rs 2.08 lakh crore in the previous fiscal, Minister of State for Finance Pankaj Chaudhary said in a written reply in the Rajya Sabha.
Write-off was highest at Rs 2.34 lakh crore during 2019-20, which came down to Rs 2.02 lakh crore in the following year and to Rs 1.74 lakh crore in 2021-22.
As per the RBI guidelines and policy approved by banks' 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, he said.
«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 the said guidelines and policies of the respective boards,» he said in a reply to a question asked by Congress member Randeep Singh Surjewala.
Such write-off does not result in waiver of liabilities of borrowers to repay and therefore, write-off does not benefit the borrowers, he said.
The borrowers of written-off loans continue to be liable for repayment and banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available to them, he added.
Against Rs 9.9 lakh crore write-off, recovery was to the tune of Rs 1.84 lakh crore, or just 18 per cent of
