Public sector banks (PSBs) have written-off non-performing assets (NPAs) or bad loans worth Rs 2.41 lakh crore in over three years. Minister of State of Finance Shiv Pratap Shukla has stated that writing-off bad loans is a regular exercise carried out by banks to clean up their balance sheets and achieving taxation efficiency. As per the Reserve Bank of India (RBI) data on global operations, PSBs wrote off Rs 2,41,911 crore from financial year 2014-15 till September 2017.
Shukla pointed out that loans are written off for tax benefit and capital optimisation, while borrowers of such loans continue to be liable for repayment. He also noted that recovery of dues takes place on ongoing basis under legal mechanism, including SARFAESI Act and debt recovery tribunals. Therefore, he said that write-offs does not benefit borrowers.
Besides, according to the latest RBI data, 21 state-run banks which account for more than two-thirds of the country's banking assets had as of December 31 stressed loans of Rs 8.26 lakh crore, or 15.8 percent of their total loans.