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
