NEW DELHI: Gross Non-Performing Assets (NPAs) under the Narendra Modi-led NDA rule till last year is nearly 365 per cent more than what banks suffered due to bad loans during the UPA’s last six years, shows an analysis of RBI data.
Another trend noticed during the scrutiny of banking data of last 12 years is that the Public Sector Banks (PSBs) are writing-off massive amount of bad loans in the recent years — there was a 21-time jump when one looks at the data from 2008-14 to 2014-20.
The RBI data show that new gross NPAs of PSBs from 2014-15 to 2019-20 stood at nearly Rs 18.28 lakh crore, up from nearly Rs 5 lakh crore from 2008-09 to 2013-14 in the UPA rule.
Gross NPA is the term used by banks that refer to the sum of any unpaid debt, which is classified as non-performing loans.
PSBs wrote off bad loans worth Rs 6,83,388 crore in the last six years, a massive rise from Rs 32,109 crore incurred in the period from 2008 to 2014. Banks write off NPAs which are over four-year-old as part of their exercise to clean up balance-sheet.
“As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues in written-off loan accounts continues, write-off does not benefit the borrower,” Junior Finance Minister Anurag Thakur had informed Parliament in 2019.
The RBI data, however, show that the write-off of bad loans is up manifold during the recent years. Consider this: Rs 50,978 crore was written-off from the balance sheets of PSBs in 2014-15.
It, then, rose Rs 1,83,168 crore in 2018-19 and was marginally down to Rs 1,78,305 crore in 2019-20.
Similarly, banks continued to record high additions of fresh bad loans. From Rs 1,77,860 crore in 2014-15, NPAs rocketed to Rs 4,88,175 crore in 2017-18.
A slight improvement was marked in 2018-19 when the figure went down to Rs 2,10,530 crore. But, the trend was temporary as the addition in bad loans rose to Rs 2,38,464 crore in 2019-2020.
The Congress and other opposition parties have been critical of the Modi government for writing-off bad loans of big industrialists.
In December, Rajasthan CM Ashok Gehlot had written to the PM demanding a waiver of outstanding loans taken by farmers, saying while the BJP government waived off Rs 7.95 lakh crore of industrialists in its first tenure, it had not done anything for farmers.
Post the PNB-Nirav Modi fiasco, the government has advised PSBs to obtain a certified copy of the passport of the promoters, directors and other authorised signatories of companies availing of loan facilities of more than Rs 50 crore.
Congress critical of loan waiver to big bosses
The Congress and other opposition parties have been critical of the Modi government for writing-off bad loans of big industrialists. Rajasthan CM Ashok Gehlot had written to the PM demanding a waiver of loans taken by farmers.