New Delhi : Banks around the country wrote-off Rs 2.02 lakh crores in bad loans or non-performing assets(NPAs) in the last fiscal, climbing the total write-offs in past 10 years to a whopping Rs 11.68 lakh crores. Of this, Rs 10.72 are NPAs after coming to power of the Modi government, says information given out by RBI under RTI.
The write-offs represent 10 percent of non-food bank advances. Loans to non-food sector total to Rs 110.79 lakh crores. As per current Budget, the central government plans to borrow Rs 12.05 lakh crores from markets - an amount almost equal to the sums written off.
75 percent of the write-offs pertain to public sector banks. Bad loans written over time are : Rs 2.34 lakh crores in 2019-20; Rs 2.36 lakh crores in 2018-19 and Rs 1.08 in 2017-18 and Rs 1.08 lakh crores during 2016-17.
Banks argue that write-offs do not end loan recovery potential and that the NPAs are merely being transferred to a separate account for accuracy purposes. That is in contrast with the set norm that banks write off an NPA when all recovery avenues are exhausted, although a loan may be marked so if default exceeds 3 consecutive quarters. An apparent benefit coming out of these write-offs is that it helps banks to whitewash their bad loan portfolio.
