Indian banks write off Rs 10.6 Lakh Crore, mostly linked to large corporates in 5 Years: Reports
New Delhi: In a disclosure during the winter session, the Union Government on Monday (Dec 04) informed the Lok Sabha, that in the timeline of last five years, Scheduled Commercial Banks (SCB’s) wrote off an estimated Rs 10.6 Lakh crore, with most of the amount linked to large corporate entities, as reported by he Hindu Business Line.
Meanwhile, around 2,300 borrowers, each with loans exceeding Rs 5 crore, intentionally defaulted on around Rs 2 lakh crore, said the government.
According to the Hindu BusinessLine, the write-offs were conducted in accordance with Reserve Bank of India (RBI) guidelines and approved bank board policies, involving the removal of non-performing assets (NPAs) from balance sheets after full provisioning.
The Newspaper quoted the Minister of State in the Finance Ministry Bhagwat Karad as saying in his written response, “Such write-offs do not result in waiver of liabilities of borrowers to repay.” The process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower, Karad added.
According to the report, the minister did not disclose the names of individual borrowers whose accounts have been written off, citing the RBI Act. However, he mentioned that all SCBs collectively collected an aggregate amount of Rs 5,309.80 crore as penal charges, including penalties for delays in loan repayment, during the financial year 2022-23.
Responding to another question, Karad stated that SCBs and All India Financial Institutions report credit information of borrowers with aggregate exposure of Rs. 5 crore and above to the Central Repository of Information on Large Credits (CRILC). As of March 31, 2023, the CRILC database indicated that 2,623 unique borrowers were classified as wilful defaulters, with an aggregate outstanding amount of over Rs 1.96 lakh crore by SCBs.
Karad clarified that allowing wilful defaulters to enter into compromise settlements serves the primary regulatory objective of providing multiple avenues for lenders to recover defaulted funds without significant delays. He highlighted that inordinate delays in the recovery process can result in asset value deterioration and hinder ultimate recoveries.
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I will do my duty, party will decide the rest: D.K. Shivakumar
Hubballi: Karnataka’s Deputy Chief Minister and KPCC President D.K. Shivakumar reaffirmed his commitment to his party, stating that he will perform his duties diligently and leave decisions about his future to the party leadership.
Responding to questions from the media at the Hubballi airport on Tuesday, Shivakumar said, "I will do my duty. The party will decide the rest."
He emphasized his loyalty and dedication to the party’s work, dismissing any personal ambition for positions of power. "I don’t need to go and look for any position. I will do whatever work needs to be done for the party and the government. I am not in a hurry," he added.
