Finance minister Nirmala Sitharaman has said that banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years. She mentioned ‘Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their boards. As per inputs received from RBI, Scheduled Commercial Banks (SCBs) wrote off an amount of Rs 10,09,511 crore during the last five financial years.’
She stated 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, filing of cases under the Insolvency and Bankruptcy Code, 2016 and through sale of non-performing assets.
Further, she stated SCBs have recovered an aggregate amount of Rs 6,59,596 crore, including recovery of Rs 1,32,036 crore from written-off loan accounts during the last five financial years. Moreover, she said in cases where it is prima facie found that officials are responsible for the lapses of non-compliance with the laid down systems and procedures or misconduct or non-adherence to the due-diligence norms, action is initiated against the erring officials under the board-approved staff accountability policy.
