December 13, 2022
Abir Ranjan Biswas’s Special Mention on the concerns over write-offs worth Rs 10 lakh crore to banks by the government
Sir, a Right to Information reply from the Reserve Bank of India to a newspaper has unearthed that there has been a huge amount of write-offs, of over Rs. 10 lakh crores in the last five years, to banks by the Government and an increase in nonperforming assets. The sum of write-offs amounts to 61 per cent of India’s gross fiscal deficit. According to data, 2,700 wilful defaulters were recorded in 2021-22. This number was 2,840 in 2020-21. The Non Performing Assets have reduced considerably for banks. State Bank of India saw a Rs. 2.04 lakh crore reduction, Punjab National Bank saw a reduction of Rs. 67,000 crores and Bank of Baroda saw a reduction of Rs. 66,000 crores in the last five years. However, after receiving such write-offs repeatedly, the banks have no incentive to recover the said loans. This is evident in the fact that only 13 per cent of these loans have been recovered so far. Public sector banks account for 73 per cent of the
write-offs reported. There is no policy on recovery of such loans and manner of recovery, leaving the process of collection of loans entirely to the discretion of banks. Hence, there is a need to form a uniform policy for recovery of loans. In this light, I urge the Government to find a solution to the concern of write-offs to the banks and their recovery henceforth.