NEW DELHI: Amid growing concern over large amounts of bad loans being written off by banks, the government has said non-performing assets (NPAs) worth Rs 7.15 lakh crore have been recovered by the banks in the past five years.
Responding to a question in Lok Sabha, Minister of State (MoS) for Finance Bhagwat Karad said that the amount (Rs 7.15 lakh crore) recovered also includes written-off loans. In the last five years, banks have written off Rs 10.5 lakh crore in bad loans. When banks write off loans, they remove them from their books and stop counting such loans as their assets.
The MoS Finance explained that as per RBI guidelines, NPAs are removed from banks’ balance sheets after four years by way of a write-off. “Such write-off does not result in waiver of liabilities of borrowers to repay. 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,” the minister said.
The minister further said that gross NPAs of banks have declined in the last five years from Rs 10.37 lakh crore (gross NPA ratio of 11.18%) in March 2018 to Rs 5.71 lakh crore (gross NPA ratio of 3.87%) as on March 2023. Meanwhile, finance minister Nirmala Sitharamn has told parliament that the National Asset Reconstruction Company Limited (NARCL) has so far acquired three borrower entities with an aggregate debt exposure of Rs 21,349 crore.
Banks wrote off Rs 10.5L cr NPAs in 5 yrs
In the last five years, banks have written off Rs 10.5 lakh crore bad loans. When banks write off loans, they remove them from their books and stop counting such loans as their assets. Responding to a question in Lok Sabha, Minister of State (MoS) for Finance Bhagwat Karad said the amount (Rs 7.15 lakh crore) recovered also includes written-off loans