Parliament proceedings | Loans worth 10.09 lakh crore written off in 5 years: FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman said recovery in NPA (non performing asset) accounts, including written-off loans, was an on-going process

December 19, 2022 02:53 pm | Updated December 20, 2022 07:40 am IST - New Delhi

Finance Minister Nirmala Sitharaman speaks in the Lok Sabha during the ongoing Winter Session of Parliament, in New Delhi on December 19, 2022. Photo: Sansad TV via PTI

Finance Minister Nirmala Sitharaman speaks in the Lok Sabha during the ongoing Winter Session of Parliament, in New Delhi on December 19, 2022. Photo: Sansad TV via PTI | Photo Credit: PTI

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.

Also read | Parliament Winter Session live updates | December 19, 2022

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.

Also read |Explained | RBI’s concerns on slow deposit growth 

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.

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