Public Sector Banks write off loans amounting to nearly 2.41 lakh crore rupees

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The Hush Post: The Minister of State for Finance, Shiv Pratap Shukla revealed that Public Sector Banks had written off loans worth nearly 2.41 lakh crore rupees. These loans have been written off in a period of three years, between 2014-17.

In a written reply to the Rajya Sabha, the Minister of State for Finance said that writing off bad loans is an exercise that is conducted regularly by banks. This is done in order to clean balance sheets and also to achieve taxation efficiency.

Shiv Pratap Shukla, Minister of State for Finance revealed that Public Sector Banks had written off loans amounting to nearly 2.41 lakh crore rupees
Shiv Pratap Shukla, Minister of State for Finance revealed that Public Sector Banks had written off loans amounting to nearly 2.41 lakh crore rupees

“As per Reserve Bank of India (RBI) data on global operations, public sector banks have written-off (including compromise) an amount of Rs. 2,41,911 crore from financial year 2014-15 till September 2017,” said the minister.

This, however, does not mean that the borrowers are not liable to pay back their dues. To ensure such write-offs do not benefit borrowers, recovery of dues takes place on a regular basis under a legal mechanism.

Refusing to disclose the details of the borrowers, the MoS said that such details are protected keeping in view the confidentiality clause of the Reserve Bank of India.

A prolonged economic slowdown has put pressure on companies’ abilities to service their loans, thus increasing the stressed loan pile in the Indian banking system by nearly two times. Profligate lending practices and fraudulent transactions have also led to an increase in the problem.

As per the latest data issued by the RBI, 21 state run banks had stressed loans of Rupees 8.26 lakh crores. These banks account for more than two thirds of the country’s banking assets.

Criticising the Central Government for writing off loans, Mamta Bannerjee said “I am shocked to see that at a time, when the farmers in the country are crying and committing suicide for their loan burden and asking for waiver of farmers’ loan, the Government of India have not even considered that.”

Targeting the government over its decision to not disclose names of borrowers, the TMC Chief also said “Even in Parliament reply, the Government of India says that the details of credit information by a public sector bank cannot be disclosed.”

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