As per Reserve Bank of India (RBI) data on global operations, aggregate gross advances of nationalised banks increased from Rs. 11,33,137 crore as on 31.3.2008 to Rs. 34,03,717 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of nationalised banks, as per RBI data on global operations, rose from Rs. 1,92,809 crore as on 31.3.2015, to Rs. 6,16,586 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 49,795 crore to Rs. 5,66,791 crore as on 31.3.2019 (provisional 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. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance-sheet, tax benefit and capital optimisation, in accordance with RBI guidelines and policy approved by their Boards. 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. Bank-wise details of amount written-off by nationalised banks during the last three financial years are at Annex.
This was stated by Shri Anurag Singh Thakur, Minister of State for Finance & Corporate Affairs in a written reply to a question in Rajya Sabha
Annex
Reduction in NPAs due to write-offs (including compromise)
| Amounts in crore Rs. | As per RBI data on global operations, gross advances of nationalised banks increased from Rs. 11,33,137 crore as on 31.3.2008 to Rs. 34,03,717 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia,aggressive lending practices, wilful default/loan frauds/ corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of nationalised banks have declined by Rs. 49,795 crore to Rs. 5,66,791 crore during 2018-19 (provisional 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. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance-sheet, tax benefit and capital optimisation, in accordance with RBI guidelines and policy approved by their Boards. 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. |
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| Nationalised Bank | FY 2016-17 | FY 2017-18 | FY 2018-19 | |
| Allahabad Bank | 2,442 | 3,635 | 4,219 | |
| Andhra Bank | 1,623 | 1,666 | 2,280 | |
| Bank of Baroda | 4,348 | 4,948 | 13,102 | |
| Bank of India | 7,346 | 8,976 | 7,405 | |
| Bank of Maharashtra | 1,374 | 2,460 | 5,127 | |
| Canara Bank | 5,545 | 8,310 | 14,267 | |
| Central Bank of India | 2,396 | 2,924 | 10,375 | |
| Corporation Bank | 3,574 | 8,228 | 5,989 | |
| Dena Bank | 833 | 661 | 4,672 | |
| Indian Bank | 437 | 1,606 | 2,872 | |
| Indian Overseas Bank | 3,066 | 6,908 | 7,794 | |
| Oriental Bank of Commerce | 2,308 | 6,357 | 6,457 | |
| Punjab and Sind Bank | 491 | 460 | 1,635 | |
| Punjab National Bank | 9,205 | 7,407 | 12,253 | |
| Syndicate Bank | 1,271 | 2,400 | 6,775 | |
| UCO Bank | 1,937 | 2,735 | 4,420 | |
| Union Bank of India | 1,264 | 3,477 | 7,771 | |
| United Bank of India | 714 | 1,867 | 5,365 | |
| Vijaya Bank | 1,068 | 1,539 | 1,518 | |
Source: RBI
