Rs 2.4 lakh Cr loans written off in over 3 yrs: West Bengal CM slams Govt

Mumbai: Public sector banks (PSBs) wrote off Rs 2.41 lakh crore worth of loans in over three years, between April 2014 and September 2017. The revelation was made by Minister of State for Finance Shiv Pratap Shukla in a written reply in Parliament on Tuesday.

The disclosure came under strong criticism from Bengal Chief Minister and Trinamool Congress supremo Mamata Banerjee. "I am shocked to see that at a time, when the farmers in the country are crying and committing suicide for their loan burden and asking for waiver of farmers' loan, the Government of India have not even considered that," the Banerjee wrote on her Facebook.

In his reply to the Rajya Sabha, the Union Finance Minister of State said that writing off non-performing assets (NPAs) or bad loans is a regular exercise conducted by banks to clean up their balance sheet and to achieve taxation efficiency.

"As per Reserve Bank of India (RBI) data on global operations, public sector banks have written-off (including compromise) an amount of Rs 2,41,911 crore from financial year 2014-15 till September 2017," the minister said.

Borrowers, however, continue to be liable for repayment despite the write-off, the minister added.

The Union Minister said the recovery of dues takes place on an ongoing basis under a legal mechanism so write-offs do not benefit borrowers.

Shiv Pratap Shukla also informed the Rajya Sabha that according to the RBI, borrower-wise credit information is not available for disclosure. The RBI Act provides that credit information submitted by a bank should be treated as confidential, he added.

Read: PSBs wrote off Rs 2.41 lakh crore loans in over 3 years

The non-disclosure of the borrower information was also criticised by the West Bengal Chief Minister.

"Even in Parliament reply, the Government of India says that the details of credit information by a public sector bank cannot be disclosed," Mamata Banerjee said.

The stressed-loan pile in the Indian banking system has more than doubled in the five years as a prolonged economic slowdown pressured companies' ability to service their loans, while in some cases profligate lending practices and fraudulent transactions have aggravated the problem.

A Rs 13,000-crore fraud in the country's second-biggest state-run lender Punjab National Bank (PNB) that was first disclosed in early February has stunned the financial sector of India and has triggered a crackdown by regulators to unearth more such fraudulent deals.

The latest RBI data says that 21 state-run banks which account for more than two-thirds of the country’s banking assets had stressed loans of Rs 8.26 lakh crore as of December 31. This is 15.8 per cent of their total loans.

(With inputs from agencies)