Banks have written off 11.17 lakh crore in bad loans from their books in the previous six years, up to and including the fiscal year 2021-22, Parliament was informed on Tuesday.
Non-performing assets (NPAs), including those for which full provisioning has been made at the end of four years, are written off from the balance sheet of the bank concerned, said Minister of State for Finance Bhagwat Karad in a written answer.
Banks mark down NPAs as part of their regular exercise to clean up their balance sheets, get tax breaks, and optimize capital, he said, adding that the write-off is done in conformity with RBI rules and policy authorized by their boards.
According to RBI statistics, public sector banks (PSBs) and scheduled commercial banks (SCBs) wrote down an aggregate value of 8,16,421 crore and 11,17,883 crore during the previous six fiscal years, respectively,” he said.
In response to another question, Mr. Karad stated that the Reserve Bank of India (RBI) informed him that the total number of wilful defaulters in public sector banks with outstanding loans of 25 lakh or more was 8,045 as of June 30, 2017, and 12,439 as of June 30, 2022; whereas in private sector banks, it was 1,616 as of June 30, 2017, and 2,447 as of June 30, 2022.
After May 1, 2017, 515 fraud cases, including those involving deliberate defaulters, have been registered by the Enforcement Directorate (ED) under the terms of the Prevention of Money Laundering Act (PMLA), 2002.
According to him, as of December 15, 2022, assets worth Rs 44,992 crore (approx.) had been attached in these cases, and the Directorate had filed 39 criminal charges.
In compliance with RBI rules and policy adopted by their boards, banks write down NPAs as part of their routine exercise to clean up their balance sheets, obtain tax benefits, and optimize capital, he said.
In response to another query, Mr. Karad stated that according to RBI statistics, Scheduled Commercial Banks had recovered a total of 6,59,596 crore, including 1,32,036 crore from written-off loan accounts during the previous five fiscal years.
PSBs reported an average net profit of 66,543 crores in the financial year 2021-22 and 40,992 crores in the first half of the financial year 2022-23, claimed.