Between 2015 and 2018, Indian banks have lost Rs 2.17 lakh crore on account of writing off non-performing loans (NPAs) of 525 defaulters, each owing Rs 100 crore or more, CNN-News18 reported on Thursday, October 10. The number of such defaulters (who are essentially top defaulters) and subsequent write-offs increased since Narendra Modi came to power in 2014, according to data from responses to Right to Information (RTI) queries furnished by Reserve Bank of India (RBI).
These figures point out the loopholes in Indian Banking system as scheduled commercial banks continued to tackle the NPA problem, while the government remained toothless but has been on a spree to recapitalise the public sector banks (PSBs) during these years.
According to data presented in Lok Sabha, in the last five financial years under BJP regime, PSBs have been recapitalised to the extent of Rs 3.19 lakh crore, with an infusion of Rs 2.5 lakh crore by the government and mobilisation of over Rs 66,000 crore by PSBs themselves.
For 2019-20, Union government has set aside Rs 70,000 crore in the Union Budget to recapitalise PSBs.
Also read: Bank Frauds, Wilful Defaults, NPAs and Write-offs: Banks Cheated in Modi Years
These write-offs are in accordance to an RBI directive which asked the scheduled commercial banks to come clear on the amount to be prudentially written off and set the accounts right. Simply put, ‘Write off’ means that the unreturned bank loans are put in the category of uncollectible debt.
Furthermore, the RTI data revealed that from September 2014 to March 2015, 109 unique borrowers (owing Rs 100 crore or more) had their loans to the tune of Rs 40,798 crore written off. This number grew to 199 unique borrowers by the end of March 2016 with a total of Rs 69,976 crore amount written off.
In the financial year 2016-17, when demonetisation took place, the number of such borrowers owing Rs 100 crore and more grew to 343, a substantial 72% rise in the number of such loanees, while the amount written off increased to Rs 1.27 lakh crore.
As on March 31, 2018, the number of such defaulters increased to 525 and the total amount written off as bad debts shot up to Rs 2.17 lakh crore, which is nearly a 70% rise.
Banks-wise, State Bank of India (SBI) has written off highest amount of such bad loans followed by Punjab National Bank (PNB), IDBI, Bank of India, Corporation Bank, Bank of Baroda, Central Bank of India, Axis Bank and ICICI Bank.
Between 2014 to 2018, Modi’s first term, the total amount written off for bad loans (NPAs) was worth a mind-boggling Rs.5.56 lakh crore.
Also read: Corporate Bonanza: Trend of Writing off Bad Loans Continues