IGI Logo

Finance Minister Nirmala Sitharaman has said that public sector banks could recover only 14 per cent of the written-off loans worth Rs 7.34 lakh crore in the last five years ending March 2022. Of Rs 7.34 lakh crore written-off loans, state-owned lenders recovered Rs 1.03 lakh crore. So after recovery, net written-off stood at Rs 6.31 lakh crore in the last five years.

The Minister said non-performing assets (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 as per RBI guidelines and policy approved by bank boards. Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance sheets, avail tax benefits and optimise capital, in accordance with RBI guidelines and policy approved by their boards. Such write-off does not result in waiver of liabilities of borrowers to repay.

She further said as borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower. Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available, such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.