Lok Sabha Question No. 3994 (UNSTARRED), answered on 2019-01-04
Subject: GNPAs
Ministry: FINANCE
Asked by: GAURAV GOGOI

## GOVERNMENT  OF INDIA MINISTRY OF  FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA

## UNSTARRED QUESTION NO: 3994 TO BE ANSWERED ON THE 4 th  JANUARY,  2019/PAUSHA  14, 1940  (SAKA)

## QUESTION GNPAs

## 3994: SHRI GAURAV  GOGOI:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether   the  Gross  Non-Performing   Assets  (GNPAs)   of  the  Public   Sector   Banks (PSBs) has risen  significantly between  2014 and 2018, if so, the details  thereof,  bankwise;
- (c) the action  taken  by  the Government  against  the wilful  defaulters?
- (b) whether  the rise in GNPA  of PSBs is due mainly  by  wilful  defaulters,  if so, the total outstanding  loans by  wilful  defaulters  during  the last three  years  and the current  year, bank-wise;  and

## ANSWER

## (SHRI SHIV PRATAP  SHUKLA)

## To be answered by THE MINISTER OF  STATE  IN THE  MINISTRY OF  FINANCE

(a)  and  (b):  As  per  Reserve   Bank of  India  (RBI)  data  on  domestic   operations,   the aggregate  gross advances of PSBs increased  from Rs. 16,98,109  crore  as on 31.3.2008  to Rs. 45,90,570  crore  as on 31.3.2014.  As per RBI inputs,  the primary  reasons for 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  PSBs, 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. During  the fourth  quarter  of the financial year   (FY)  2017-18,  all  such  schemes  for  restructuring stressed  loans  were   withdrawn. Primarily as a result of transparent  recognition  of stressed assets as NPAs,  gross NPAs of PSBs, as per RBI data on domestic  operations,  increased  from Rs. 2,16,739 crore  as on 31.3.2014,  to Rs. 8,45,475 crore  as on 31.3.2018.  Over the last four and half FYs, to reduce  NPAs   and  strengthen   the  financial   position   of  PSBs,  Government   has  taken comprehensive   steps under  its 4R's strategy   of  recognising   NPAs  transparently, resolving  and recovering  value  from stressed accounts  through  clean and effective laws and  processes,  recapitalising banks,   and  reforming   banks   through   the  PSB  Reforms Agenda  to  make  them   responsible   and  responsive.   The  results   of  Government's comprehensive   4R's  approach   are  now   visible   and  gross  NPAs   of  PSBs  have  started declining,   after  peaking   in  March 2018,  registering   a  decline   thereafter   of  Rs.  19,864 crore   to  Rs.  8,25,611 crore   as  on  30.9.2018   (provisional   data),   whereas,   as  per  data reported   by   PSBs,  as  on  the  said date,   wilful   defaulters'   outstanding   amount   was   Rs. 1,47,081 crore.

Government  has asked PSBs to examine  all accounts  exceeding  Rs. 50 crore,  if classified as NPA,  from the angle of possible  fraud.

Bank-wise   details   of  gross  NPAs   of  PSBs  and  bank-wise   details   of  total   quantum   of outstanding loans against wilful defaulters of PSBs,  are at Annexures-I and  II respectively.

(c):  A  number   of  steps  have  been  taken   by   way   of  action   against   wilful   defaulters, including, inter-alia , the following:

- (2) As per data reported  by  PSBs, till  30.9.2018, 2,571 FIRs have been registered against   wilful   defaulters,   9,363  suits  have  been  filed  for  recovery   from them, and  action   has  been  initiated   under the  Securitisation   and  Reconstruction of Financial  Assets and Enforcement  of Security  Interest  Act,  2002 in respect of 7,616 cases of wilful  defaulters.
- (1) As  per  RBI  instructions, wilful   defaulters   are  not   sanctioned   any   additional facilities  by  banks  or financial  institutions, their  unit  is debarred  from floating new  ventures   for  five  years,   and  lenders   may   initiate   criminal   proceedings against  them,  wherever  necessary.
- (3) As  per  Securities   and  Exchange   Board  of India  (Substantial   Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016, wilful defaulters   and  companies   with   wilful   defaulters   as  promoters/directors are debarred  from accessing  capital  markets  to raise funds.
- (5) The Fugitive  Economic  Offenders  Act,  2018 has been enacted  to provide  for attachment   of  property   of  fugitive   economic   offender,   confiscation   of  their property and  disentitling them  from  defending   any   civil claim. Further, Government  has advised PSBs to obtain  certified  copy  of the passport  of the promoters/directors and  other   authorised   signatories   of  companies   availing loan facilities  of more  than  Rs. 50 crore.
- (4) Under  the Insolvency  and Bankruptcy Code,  2016 wilful  defaulters  have been debarred  from participating in the insolvency  resolution  process.
- (6) Government  has asked PSBs to examine  all accounts  exceeding  Rs. 50 crore,  if classified  as NPA,  from the  angle  of possible  fraud.
- (7) RBI  has  issued  instructions   to  lending   institutions that   they   can  consider publication   of  the  photographs   of  only   those  borrowers   who   have  been declared as wilful defaulters following the mechanism set out in  RBI instructions, for which  the lending  institutions shall  formulate  a policy  with  the approval  of their  Board of Directors.

## Details of gross Non-Performing  Assets of Public Sector Banks Amounts  in crore  Rs.

| S. N.   | Bank          |                 | GrossNPAs        |                   | *AssetQualityReview(AQR)initiatedin 2015 for clean and fullyprovisionedbank balance-sheets revealed high incidenceof Non-PerformingAssets (NPAs).As a result of AQR and subsequent transparent recognition by PSBs, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlierunder flexibilitygiven to restructuredloans, were providedfor. Allsuch schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparentrecognitionof stressed assets as NPAs,the gross NPAsof PublicSectorBanks(PSBs) increased. **Overthe last four and half FYs, to reduceNPAsand strengthenthe financialposition of PSBs, Government has takencomprehensivesteps underits 4R's strategyof recognising NPAs transparently, resolving and recoveringvalue from stressed accounts through clean and effective laws and processes, recapitalisingbanks, and reformingbanks throughthe PSB ReformsAgenda to makethemresponsibleand responsive.The resultsof Government'scomprehensive 4R's approach are now visible and gross NPAsof PSBs have started declining, after peakingin March2018, registeringa declineof Rs. 19,864 crore,from Rs. 8,45,475 crore in March2018 to   |
|---------|---------------|-----------------|------------------|-------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|         |               | As on 31.3.2014 | As on 31.3.2018* | As on 30.9.2018** | Rs. 8,25,611 crorein September2018 (provisional data).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 1       | AllahabadBank | 7,961           | 26,419           | 27,065            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| 2       | AndhraBank    | 5,858           | 28,124           | 27,623            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

|   3 | Bank ofBaroda                 | 9,894   | 48,189      | 46,454      |
|-----|-------------------------------|---------|-------------|-------------|
|   4 | Bank ofIndia                  | 10,274  | 51,086      | 50,338      |
|   5 | Bank ofMaharashtra            | 2,860   | 18,433      | 16,873      |
|   6 | CanaraBank                    | 7,371   | 44,432      | 41,907      |
|   7 | CentralBankof India           | 11,500  | 38,131      | 37,411      |
|   8 | Corporation Bank              | 4,737   | 22,213      | 22,400      |
|   9 | DenaBank                      | 2,616   | 16,361      | 16,140      |
|  10 | IDBI BankLimited              | 9,949   | 46,641      | 50,690      |
|  11 | IndianBank                    | 4,284   | 11,765      | 12,015      |
|  12 | IndianOverseasBank            | 7,838   | 36,515      | 35,607      |
|  13 | OrientalBankof Commerce       | 5,618   | 26,134      | 25,673      |
|  14 | Punjaband SindBank            | 2,554   | 7,802       | 7,202       |
|  15 | PunjabNationalBank            | 18,611  | 83,897      | 80,993      |
|  16 | SyndicateBank                 | 4,264   | 23,731      | 24,922      |
|  17 | UCOBank                       | 6,275   | 29,470      | 28,822      |
|  18 | UnionBankof India             | 9,142   | 45,824      | 48,575      |
|  19 | UnitedBank ofIndia            | 7,118   | 16,552      | 15,163      |
|  20 | VijayaBank                    | 1,986   | 7,526       | 7,557       |
|  21 | StateBank ofIndia (SBI)       | 57,819  | 2,16,228    | 2,02,179    |
|  22 | StateBank ofBikanerand Jaipur | 2,733   | MergedinSBI | MergedinSBI |
|  23 | StateBank ofHyderabad         | 5,824   |             |             |
|  24 | StateBank ofMysore            | 2,819   |             |             |
|  25 | StateBank ofPatiala           | 3,758   |             |             |
|  26 | StateBank ofTravancore        | 3,077   |             |             |

Source: RBI (domestic operations, September 18 provisional data)

Lok

## Sabha Unstarred  question no: 3994,  to be answered on 4.1.2019

## Details of total  quantum  of outstanding  loans against wilful  defaulters  of Public Sector Banks

| Bank                          | As on 31.3.2016   | As on 31.3.2017   | As on 31.3.2018   | As on 30.9.2018   |
|-------------------------------|-------------------|-------------------|-------------------|-------------------|
| AllahabadBank                 | 539               | 2,223             | 3,965             | 3,581             |
| AndhraBank                    | 3,964             | 3,934             | 3,957             | 4,264             |
| Bank ofBaroda                 | 1,662             | 4,883             | 6,253             | 8,176             |
| Bank ofIndia                  | 4,426             | 2,634             | 7,463             | 10,207            |
| Bank ofMaharashtra            | 751               | 822               | 1,518             | 1,518             |
| CanaraBank                    | 3,630             | 3,659             | 4,759             | 4,810             |
| CentralBankof India           | 4,409             | 4,921             | 6,197             | 6,558             |
| Corporation Bank              | 2,343             | 2,227             | 2,453             | 2,764             |
| DenaBank                      | 919               | 1,515             | 1,877             | 1,824             |
| IDBI BankLimited              | 3,064             | 3,131             | 4,828             | 9,971             |
| IndianBank                    | 328               | 1,082             | 1,373             | 1,335             |
| IndianOverseasBank            | 3,473             | 3,473             | 4,485             | 5,395             |
| OrientalBankof Commerce       | 3,799             | 4,307             | 4,215             | 5,091             |
| Punjaband SindBank            | 248               | 286               | 283               | 276               |
| PunjabNationalBank            | 11,486            | 12,278            | 15,190            | 23,469            |
| SyndicateBank                 | 922               | 1,107             | 1,162             | 1,165             |
| UCOBank                       | 4,251             | 5,715             | 5,722             | 6,253             |
| UnionBankof India             | 3,446             | 3,784             | 5,103             | 5,758             |
| UnitedBank ofIndia            | 1,857             | 1,829             | 1,737             | 1,734             |
| VijayaBank                    | 958               | 3,464             | 5,041             | 5,682             |
| StateBank ofIndia             | 12,466            | 15,070            | 34,436            | 37,250            |
| StateBank ofBikanerand Jaipur | 2,100             | 2,260             | MergedwithSBI     | MergedwithSBI     |
| StateBank ofHyderabad         | 2,145             | 2,178             |                   |                   |
| StateBank ofMysore            | 1,079             | 1,388             |                   |                   |
| StateBank ofPatiala           | 1,899             | 3,123             |                   |                   |
| StateBank ofTravancore        | 566               | 1,086             |                   |                   |

Amounts

Source: Banks in crore  Rs.