Farm loan written-off by Public Section Banks 

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The details of reduction in Non Performing Asset (NPA) due to write off (including compromise) from 2014-15 to 2017-18 in respect of Public Sector Banks (PSBs) as reported by Reserve Bank of India (RBI) is given in Annexure I.

Asset Quality Review (AQR) carried-out in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). Expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were reclassified as NPAs and provided for. PSBs initiated cleaning up by recognising NPAs and provided for expected losses. Primarily as a result of AQR and subsequent transparent recognition, the gross NPAs of PSBs increased by Rs. 6,16,586 crore between March 2015 and March 2018 (provisional data), as per the RBI data. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia, those in respect of which full provisioning has been made on completion of four years are removed from the balance-sheet of the bank concerned by way of write-off. Thus, the amounts written off during recent financial years are substantially on account of such stressed loan accounts of earlier years, which have been transparently recognised following AQR and fully provisioned. Banks write-off NPAs as part of their regular exercise to clean up their balance-sheet,tax benefit and capital optimisation. Borrowers of such written-off loans continue to be liable for repayment. Recovery of dues takes place on ongoing basis under legal mechanisms, which include, inter alia, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, and Debts Recovery Tribunals. Therefore, write-off does not benefit the borrower.

The details of reduction in NPA due to write-off (including compromise) for agriculture and allied activities during the year 2016-17 and 2017-18 in respect of Public Sector Banks (PSBs) as reported by RBI is given in Annexure II. RBI has reported that the details prior to year 2016-17 are not available.

 

Annexure I
Rs. In crores)
Name of Bank/ Bank Group Reduction in NPAs-due to write off (including compromise)
FY 2014-15 FY 2015-16 FY 2016-17 FY 2017-18
ALLAHABAD BANK 2,109 2,126 2,442 3,635
ANDHRA BANK 1,124 814 1,623 1,666
BANK OF BARODA 1,563 1,554 4,348 4,948
BANK OF INDIA 866 2,374 7,346 8,976
BANK OF MAHARASHTRA 264 903 1,374 2,460
BHARATIYA MAHILA BANK LTD. 0 0 0 0
CANARA BANK 1,472 3,387 5,545 8,310
CENTRAL BANK OF INDIA 1,386 1,334 2,396 2,924
CORPORATION BANK 779 2,495 3,574 8,228
DENA BANK 515 760 833 661
IDBI BANK LIMITED 1,609 5,459 2,868 12,515
INDIAN BANK 550 926 437 1,606
INDIAN OVERSEAS BANK 2,087 2,067 3,066 6,908
ORIENTAL BANK OF COMMERCE 925 1,668 2,308 6,357
PUNJAB AND SIND BANK 263 335 491 460
PUNJAB NATIONAL BANK 5,996 6,485 9,205 7,407
STATE BANK OF BIKANER AND JAIPUR 363 643 1,560  
STATE BANK OF HYDERABAD 355 1,204 1,430  
STATE BANK OF INDIA 21,303 15,955 20,339 39,151
STATE BANK OF INDORE        
STATE BANK OF MYSORE 740 588 161  
STATE BANK OF PATIALA 755 1,156 3,528  
STATE BANK OF TRAVANCORE 456 398 556  
SYNDICATE BANK 1,055 1,430 1,271 2,400
UCO BANK 0 1,573 1,937 2,735
UNION BANK OF INDIA 931 792 1,264 3,477
UNITED BANK OF INDIA 761 649 714 1,867
VIJAYA BANK 791 510 1,068 1,539
Public Sector Banks 49,018 57,585 81,683 1,28,229
Source: RBI

*Write-offs are done after full provisioning, and as per RBI’s guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia, those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Further, the process of recovery of dues from the borrower in such loan accounts continues and, therefore, the write-off does not benefit the borrower.

Annexure II

 

 (Rs. in crore)
Bank Name/ Agriculture and Allied Activities
Reduction in NPAs- due to Write-offs (including compromise) during
FY 2016-17 FY 2017-18
ALLAHABAD BANK 442 367
ANDHRA BANK 93 143
BANK OF BARODA 754 588
BANK OF INDIA 121 1,332
BANK OF MAHARASHTRA 142 55
BHARATIYA MAHILA BANK LTD.    
CANARA BANK 484 797
CENTRAL BANK OF INDIA 156 301
CORPORATION BANK 112 155
DENA BANK 1 6
IDBI BANK LIMITED 144 105
INDIAN BANK   54
INDIAN OVERSEAS BANK 33 493
ORIENTAL BANK OF COMMERCE 1 760
PUNJAB AND SIND BANK 5 0
PUNJAB NATIONAL BANK 197 558
STATE BANK OF BIKANER AND JAIPUR 714  
STATE BANK OF HYDERABAD 237  
STATE BANK OF INDIA 2,905 2,972
STATE BANK OF MYSORE 157  
STATE BANK OF PATIALA 35  
STATE BANK OF TRAVANCORE 3  
SYNDICATE BANK 133 195
UCO BANK 13 96
UNION BANK OF INDIA 56 1,133
UNITED BANK OF INDIA 120 113
VIJAYA BANK 34 122
Public Sector Banks 7,091 10,345
Source: RBI

 

* Write-offs are done after full provisioning, and as per RBI’s guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia, those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Further, the process of recovery of dues from the borrower in such loan accounts continues and, therefore, the write-off does not benefit the borrower.This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a Question in Rajya Sabha

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