Loans amounting to over ₹10.09 lakh crore have been written off by scheduled commercial banks in the past five financial years but the process of recovery of dues from the NPA (non performing asset) accounts is an on-going process, Finance Minister Nirmala Sitharaman told the Lok Sabha on December 19, 2022.
Her junior colleague and Minister of State for Finance, Bhagwat Kishanrao Karad, said that as per Reserve Bank of India (RBI) guidelines, names of loan defaulters could be disclosed only once their assets were put up for auction.
Ms Sitharaman said RBI data point to public sector banks recovering ₹4,80,111 crore, including ₹1,03,045 crore from written-off loans, during the last five financial years. “As per inputs received from the RBI, scheduled commercial banks have written off an amount of ₹10,09,511 crore during the last five financial years,”she said while answering supplementary questions during the Question Hour.
The borrowers of written-off loans continue to be liable for repayment and banks pursue recovery various recovery mechanisms available including filing of a suit in civil courts or in Debts Recovery Tribunals, she said.
The minister also added that action is taken under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 as well as cases filed in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement and compromise and sale of NPAs.”Therefore, write-off does not benefit the borrowers,”Ms Sitharaman said.
Replying to a question from NCP’s Supriya Sule on the problems faced by small depositors of banks against which the RBI has taken action, the Finance Minister agreed that it needs to be simplified.