Lok Sabha Question No. 1285 (UNSTARRED), answered on 2019-11-25
Subject: Writing off Bank NPAs
Ministry: FINANCE
Asked by: Deepak Baij

## †1285. SHRI DEEPAK BAIJ:

Will the Minister of FINANCE be pleased to state:

- (a) the details of the amount of Non-Performing Assets (NPAs) of various banks written off in the country during the last five years, bank-wise;
- (b) whether the evaluation of ill-effects of the said exercise on the economy has been carried out;
- (c) if so, whether the economy slowed down as a result of the said write off; and
- (d) if so, the details thereof including the loans taken by the farmers and traders in the said NPA?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (SHRI ANURAG SINGH THAKUR)

(a) to (d): As per data of the Reserve Bank of India (RBI), aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default / loan frauds /corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balancesheets revealed high incidence of Non Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per RBI data on global operations, rose from Rs. 3,23,464 crore as on 31.3.2015, to Rs. 10,36,187 crore as on 31.3.2018, and as a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019.

As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. As borrowers of written-off loans continue to be liable for

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO-†1285

ANSWERED ON-25.11.2019

## WRITING OFF BANK NPAs

repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower. Bank-wise details of NPAs written-off by SCBs for the last five financial years are at Annexure 1.

The Gross Domestic Produce for the Indian economy has grown at an average annual growth rate of 7.5% over the last five years, with growth rate of 6.8% (provisional estimates) in the financial year 2018-19, enabled by growth in gross advances of SCBs of an average of 9.3% over the last five years and growth of 13.3% in the financial year 2018-19. Details in this respect are at Annexure 2.

As per RBI data, the details of loans of SCBs in their global operations that were written-off and pertain to 'Agriculture and allied activities' and 'Services-Trade' are at Annexure 3.

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## Lok Sabha unstarred question no 1285, regarding writing off bank NPAs

## Reduction in NPAs due to write-offs by Scheduled Commercial Banks

Amounts in crore Rs.

| Bank                                            | FY 2014-15   | FY 2015-16   | FY 2016-17   | FY 207-18   | FY 2018-19   |
|-------------------------------------------------|--------------|--------------|--------------|-------------|--------------|
| AB Bank Limited                                 | -            | -            | -            | -           | 9            |
| Abu Dhabi Commercial Bank Pjsc                  | -            | -            | -            | -           | 22           |
| Allahabad Bank                                  | 2,105        | 2,097        | 2,374        | 3,578       | 3,931        |
| American Express Banking Corp.                  | 47           | 82           | 106          | 101         | 166          |
| Andhra Bank                                     | 1,124        | 814          | 1,623        | 1,666       | 2,280        |
| AU Small Finance Bank Limited                   |              |              |              | 10          | 20           |
| Australia and New Zealand Banking Group Limited | 19           | -            | -            | -           | -            |
| Axis Bank Limited                               | 1,210        | 3,012        | 1,710        | 8,120       | 7,164        |
| Bandhan Bank Limited                            |              | -            | 31           | 51          | 277          |
| Bank of America , National Association          | 13           | -            | -            | 11          | -            |
| Bank of Bahrain & Kuwait B.S.C.                 | 18           | 37           | 5            | 58          | 0            |
| Bank of Baroda                                  | 1,014        | 1,426        | 4,281        | 4,614       | 11,725       |
| Bank of Ceylon                                  | -            | -            | 0            | -           | 0            |
| Bank of India                                   | 802          | 2,244        | 7,265        | 8,957       | 5,601        |
| Bank of Maharashtra                             | 264          | 903          | 1,374        | 2,460       | 5,127        |
| Bank of Nova Scotia                             | -            | 30           | 101          | 160         | 26           |
| Barclays Bank Plc                               | 143          | 120          | 173          | 4           | -            |
| Canara Bank                                     | 1,458        | 3,271        | 5,528        | 8,299       | 13,849       |
| Catholic Syrian Bank Ltd.                       | 111          | 142          | 139          | 9           | 301          |
| Central Bank of India                           | 1,386        | 1,334        | 2,396        | 2,924       | 10,375       |
| Citibank N.A                                    | 971          | 359          | 365          | 460         | 505          |
| City Union Bank Limited                         | 148          | 125          | 163          | 195         | 264          |
| Cooperatieve Rabobank U.A.                      | -            | -            | -            | 206         | 80           |
| Corporation Bank                                | 779          | 2,495        | 3,574        | 8,228       | 5,989        |
| Credit Agricole Corporate and Investment Bank   | -            | -            | 263          | 72          | 251          |
| CTBC Bank Co. Ltd.                              | -            | 4            | -            | 60          | -            |
| DBS Bank Ltd.                                   | 867          | 135          | 945          | 144         | 17           |
| DCB Bank Limited                                | 47           | 60           | 44           | 32          | 67           |
| Dena Bank                                       | 515          | 760          | 833          | 661         | 4,672        |
| Deutsche Bank AG                                | 81           | 15           | 16           | 30          | 169          |
| Equitas Small Finance Bank Limited              |              |              | 27           | 179         | 61           |
| Federal Bank Ltd.                               | 233          | 452          | 236          | 212         | 186          |
| Firstrand Bank Ltd.                             | 34           | -            | 42           | 14          | -            |
| HDFC Bank Ltd.                                  | 1,840        | 1,854        | 2,323        | 3,266       | 4,513        |
| Hongkong and Shanghai Banking Corpn. Ltd.       | 143          | 87           | 139          | 66          | 359          |

As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/ corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019.

As per RBI guidelines and policy approved by bank Boards, nonperforming loans, including, interalia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. As borrowers of writtenoff 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.

| ICICI Bank Limited                       | 1,524   | 2,635   | 10,993   | 5,840   | 5,464    |
|------------------------------------------|---------|---------|----------|---------|----------|
| IDBI Bank Limited                        | 1,609   | 5,459   | 2,868    | 10,990  | 14,166   |
| IDFC First Bank Limited                  |         | -       | 1,371    | 998     | 1,272    |
| Indian Bank                              | 550     | 926     | 27       | 1,541   | 2,872    |
| Indian Overseas Bank                     | 2,083   | 2,067   | 1,902    | 5,449   | 6,751    |
| IndusInd Bank Ltd.                       | 602     | 281     | 466      | 783     | 1,923    |
| ING Vysya Bank Ltd.                      | 393     |         |          |         |          |
| Jammu & Kashmir Bank Ltd.                | 25      | 12      | 76       | 1,564   | 923      |
| JPMorgan Chase Bank National Association | 5       | -       | 65       | -       | -        |
| Karnataka Bank Ltd.                      | 219     | 305     | 458      | 712     | 808      |
| Karur Vysya Bank Ltd.                    | 151     | 943     | 264      | 362     | 447      |
| KBC Bank NV                              | 38      | -       |          |         |          |
| Kotak Mahindra Bank Ltd.                 | 99      | 289     | 422      | 407     | 220      |
| Lakshmi Vilas Bank Ltd.                  | 15      | 160     | 92       | 272     | 261      |
| MUFJ Bank Ltd.                           | -       | -       | 98       | -       | -        |
| Nainital Bank Ltd.                       | 0       | 0       | 1        | 13      | 1        |
| Oriental Bank of Commerce                | 925     | 1,668   | 2,308    | 6,357   | 6,457    |
| Punjab and Sind Bank                     | 263     | 335     | 491      | 460     | 1,635    |
| Punjab National Bank                     | 5,920   | 6,456   | 9,156    | 7,407   | 11,238   |
| RBL Bank Limited                         | 5       | 73      | 69       | 159     | 320      |
| SBM Bank (Mauritius) Ltd.                | 44      | 17      | 13       | 57      | -        |
| Shinhan Bank                             | -       | 6       | -        | -       | -        |
| South Indian Bank Ltd.                   | 43      | 321     | 609      | 629     | 287      |
| Standard Chartered Bank                  | 185     | 201     | 2,813    | 604     | 2,309    |
| State Bank of India                      | 20,766  | 15,659  | 19,611   | 38,895  | 56,481   |
| State Bank of Bikaner and Jaipur         | 363     | 643     | 1,560    |         |          |
| State Bank of Hyderabad                  | 355     | 1,204   | 1,430    | Merged  |          |
| State Bank of Mysore                     | 740     | 588     | 161      |         | into SBI |
| State Bank of Patiala                    | 755     | 1,156   | 3,528    |         |          |
| State Bank of Travancore                 | 456     | 398     | 556      |         |          |
| Suryoday Small Finance Bank Limited      |         |         |          | 43      | 34       |
| Syndicate Bank                           | 1,055   | 1,428   | 1,271    | 2,400   | 6,497    |
| Tamilnad Mercantile Bank Ltd.            | 55      | 99      | 244      | 594     | 264      |
| The Dhanalakshmi Bank Ltd.               | 180     | 112     | 189      | 2       | 3        |
| The Royal Bank of Scotland Plc           | 34      | 61      | -        | 49      | 115      |
| UCO Bank                                 | -       | 1,572   | 1,929    | 2,721   | 3,740    |
| Ujjivan Small Finance Bank Limited       |         |         |          | 176     | 178      |
| Union Bank of India                      | 820     | 785     | 1,219    | 3,261   | 6,362    |
| United Bank of India                     | 761     | 649     | 714      | 1,867   | 5,365    |
| Utkarsh Small Finance Bank Limited       |         |         |          | -       | 30       |
| Vijaya Bank                              | 791     | 510     | 1,068    | 1,539   | 1,518    |
| Yes Bank Ltd.                            | 53      | 258     | 142      | 709     | 469      |

Source: RBI

As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/ corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019.

As per RBI guidelines and policy approved by bank Boards, nonperforming loans, including, interalia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. As borrowers of writtenoff 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.

## Lok Sabha unstarred question no 1285, regarding writing off bank NPAs

## Details of growth of India's Gross Domestic Produce (GDP) and of the gross advances of Scheduled Commercial Banks in their global operations

| Financial year   | Growth in gross advances (year-on-year)   | GDP Growth   | GDP Growth   |
|------------------|-------------------------------------------|--------------|--------------|
| 2014-15          | 9.7%                                      | 7.4%         |              |
| 2015-16          | 8.7%                                      | 8.0%         | *            |
| 2016-17          | 4.5%                                      | 8.2%         | #            |
| 2017-18          | 10.5%                                     | 7.2%         | @            |
| 2018-19          | 13.3%                                     | 6.8%         | $            |

Source: RBI (growth in gross advances of SCBs) and Ministry of Statistics and Programme Implementation (GDP)

* Third revised estimates
- # Second revised estimates
- @First revised estimates
- $ Provisional estimates

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## Lok Sabha unstarred question no 1285, regarding writing off bank NPAs

## Details of loans pertaining to 'Agriculture and allied activities' and 'Services-Trade', written-off by Scheduled Commercial Banks

Amount in crore Rs.

| Financial year   | Agriculture and allied activities   | Services- Trade   | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |
|------------------|-------------------------------------|-------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2014-15          | 3,420                               | 20,891            | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |
| 2015-16          | 6,845                               | 30,463            | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |
| 2016-17          | 7,548                               | 33,300            | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |
| 2017-18          | 11,502                              | 41,540            | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |
| 2018-19          | 13,744                              | 40,175            | As per data of the Reserve Bank of India (RBI, aggregate gross advances of Scheduled Commercial Banks (SCBs) in their global operations increased from Rs. 25,03,431 crore as on 31.3.2008 to Rs. 68,75,748 crore as on 31.3.2014. As per RBI inputs, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia , aggressive lending practices, wilful default/loan frauds/corruption in some cases, and economic slowdown. As a result of AQR initiated in 2015 and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and were provided for. As a result of Government's 4R's strategy of recognition, resolution, recapitalisation and reforms, gross NPAs of SCBs have declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019. As per RBI guidelines and policy approved by bank Boards, non-performing loans, including, inter-alia , those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of write-off. Banks themselves write-off NPAs as part of their regular exercise to clean up their balance- sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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.   |

Source: RBI

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