Team Blitz India
The Government informed the Lok Sabha on December 4 that all scheduled commercial banks have written off nearly Rs 10.6 lakh crore in the past five years, out of which nearly 50 per cent belong to large industrial houses. It also said that nearly 2300 borrowers, each having a loan amount of Rs 5 crore or more, wilfully defaulted around Rs 2 lakh crore.
As per the Reserve Bank of India (RBI) guidelines and policy approved by bank boards, NPAs, including those in respect of which full provisioning has been made on completion of four years, are removed from the balancesheet of the bank concerned by way of write-off.
“Such write-offs do not result in waiver of liabilities of borrowers to repay,” Minister of State in the Finance Ministry Bhagwat Karad said in written response. The process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower, Karad added.
Further, banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms. These mechanisms include filing of civil suits or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and sale of non-performing assets. “Government does not spend any amount on write-offs of corporate loans,” he said.
The Minister did not name individual borrowers whose accounts have been written off citing the RBI Act. Quoting RBI, he said that all Scheduled Commercial Banks (SCBs) have collected an aggregate amount of Rs. 5,309.80 crore as penal charges, including penalty charges against delay in payment of loans, during the financial year 2022- 23.
In response to another question, Karad said that banks and financial institutions report certain credit information of all borrowers having aggregate exposure of Rs. 5 crore and above to the Central Repository of Information on Large Credits (CRILC). “As reported in CRILC database, as on 31.3.2023, total 2,623 unique borrowers were classified as wilful defaulters, with aggregate outstanding of over Rs 1.96 lakh crore by SCBs,” he said.
