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December 15, 2022

Only about 13% Recovery in Written-off Loans during Past Five Years: Govt

by CA Shivam Jaiswal in Compliance Law, RBI

Only about 13% Recovery in Written-off Loans during Past Five Years: Govt

Only about 13% of the loans written off by the scheduled commercial banks (SCBs) during the past five financial years have been recovered, the Parliament was told on Tuesday.

Government data showing details of loans written off by SCBs disclosed that total Rs10,09,510 crore were written off during the past five financial years (FYs), the finance minister (FM) told the Rajya Sabha in a written reply.

The data on recovery of the written off loans said that Rs1,32,036 have been recovered during the period.

The data showed that the amount written off by the banks has come down in the past few years as per news and media , IANS

It showed that Rs1,61,328 crore was written off in FY17-18, Rs2,36,265 crore in FY18-19, Rs2,34,170 crore in FY19-20, Rs2,02,781 crore in FY20-21 and Rs1,74,966 crore in FY021-22.

On recovery of written off loans, the data showed that Rs12,881 crore was recovered in FY17-18, Rs25,501 crore in FY18-19, Rs30,016 crore in FY19-20, Rs30,104 crore in FY20-21 and Rs33,534 crore in FY21-22.

On questions regarding the names and details of the accounts in which loans were written off for amounts of Rs10 crore and above and the names of top-25 loan defaulters of public sector banks (PSBs), the reply said: “The RBI has informed that under the provisions of section 45E of the Reserve Bank of India Act, 1934, RBI is prohibited from disclosing borrower-wise credit information.”

In another reply in the Rajya Sabha on Tuesday, the minister said: “The 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. 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, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of non-performing assets. Therefore, write-off does not benefit the borrowers.”

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