Lok Sabha Question No. 622 (UNSTARRED), answered on 2018-07-20
Subject: NPAs
Ministry: FINANCE
Asked by: VEENA DEVI, KAUSHALENDRA KUMAR, MD. BADARIDDOZA KHAN, PR. SENTHILNATHAN, KRISHNAN NARAYANASAMY RAMACHANDRAN, KURUPPASSERY VARKEY THOMAS, MAUSAM NOOR, V. SATHYABAMA, KUNWAR PUSHPENDRA SINGH CHANDEL, K. ASHOK KUMAR, R.K. BHARATHI MOHAN

## GOVERNMENT  OF INDIA

## MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL  SERVICES

## LOK SABHA

TO BE ANSWERED  ON THE 20th JULY,  2018/ASHADHA  29, 1940 (SAKA)

622:

UNSTARRED  QUESTION  NO: 622

## QUESTION NPAs

| SHRIMATIVEENA DEVI: SHRIMD.BADARUDDOZA KHAN: SHRIK.N.RAMACHANDRAN: SHRIMATIMAUSAMNOOR: SHRIKUNWARPUSHPENDRA SINGHCHANDEL: SHRIBHARATHIMOHANR.K.:   | SHRIKAUSHALENDRAKUMAR: SHRIPR.SENTHIL NATHAN: PROF.K.V.THOMAS: SHRIMATIV.SATHYABAMA: SHRIK.ASHOKKUMAR:   |
|----------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------|

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether   the  Government   has  taken   serious   note  on  the  increasing   trends   of  Non Performing  Assets (NPAs)  in Public  Sector  Banks (PSBs) and if so, the total  amount  of NPAs during  the last four years,  bank  and amount-wise;
- (c) the number  and details  of the borrowers  where  NPAs  is Rs. 100 crore  or more, bankwise;
- (b) whether  the Government  has devised a standard  method  to ascertain  the exact volume and value  of NPAs  and if so, the details  thereof  along  with  the stringent  measures  taken to recover  the loan  amount  from  the NPAs  and wilful  defaulters  and the result  achieved so far during  said period,  Bank and  amount-wise;
- (d) whether  any  Committee  has been set up to examine  the matter  and if so, the details thereof;
- (f) the new measures  proposed  by  the Government/Reserve Bank of India to contain  the growing  percentage  of NPAs?
- (e) whether  the Government  is considering  to provide  relief/opportunity to  debtors   that are willing  to repay  the loans  and if so, the details  thereof;  and

## ANSWER

## THE MINISTER  OF STATE  IN THE MINISTRY  OF FINANCE (SHRI SHIV PRATAP  SHUKLA)

## To be answered by

- (a):  As per Reserve  Bank of India (RBI) data on global  operations,  bank-wise  Gross Nonperforming   Assets  (GNPAs)   of  Public   Sector   Banks   (PSBs)  as  on  31.3.2015,   31.3.2016, 31.3.2017  and 31.3.2018,  are at Annexure.
- (b):  RBI  has  issued  Prudential   norms   on  Income  Recognition, Asset  Classification and Provisioning  pertaining  to Advances,  which  provide  for classification  of loans as NPAs.  For

addressing   the  NPA   issue,  RBI  has  put  in  place  several   measures,   prudential   instructions and guidelines   for  enabling   income   recognition, consistent   and  objective   identification of assets across the banks  and provisioning  there  against.  As per RBI instructions,  Banks have established   appropriate   internal   systems   (including   technology   enabled   processes)  for proper  and timely  identification of NPAs.  Banks undertake  various  types  of audit  such as Statutory  Audit,  Risk  Based Internal  Audit  (RBIA),  Concurrent audit,  Information  Systems (IS)  audit   and  Special   Audits   to  ensure, inter  alia ,  regulatory compliance  of the Prudential norms  on  Income  Recognition,   Asset Classification and  Provisioning pertaining to Advances.   In  addition,   RBI's  inspection   highlights   any   divergences   in  asset  classification and provisioning  as assessed by  the RBI vis-à-vis audited  financial  statements  of banks.

To deter default   on  the  part   of  wilful   defaulters   and  thereby   incentivise   recovery, as  per RBI's 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.   As  per  data reported  by  PSBs, as on 31.3.2018,  2,323 FIRs have been registered  against  wilful  defaulters, 8,835 suits have been filed for recovery  from them,  and action  has been initiated  under  the SARFAESI  in respect of 7,300 cases of wilful  defaulters.  Further,  SEBI Regulations  have been  amended   to debar wilful defaulters and companies with wilful defaulters as promoters/directors from  accessing  capital   markets   to  raise  funds  and  IBC  has  been amended to debar wilful  defaulters  from  participating in the insolvency  resolution  process.

To recover  value  from NPAs  of banks,  the Insolvency  and Bankruptcy Code,  2016 (IBC) has  been  enacted   for  time-bound   resolution   of  stressed  assets.  Further,   the  Banking Regulation  Act,  1949 has been amended  to provide  for authorisation by the Government  to RBI, for issuing  directions  to banks  to initiate  the insolvency  resolution  process under the Code.  Under  the provisions  of this amending  legislation,  as per RBI's directions,  cases have been filed under  IBC in the National  Company  Law  Tribunal  (NCLT)  in respect of 39 large defaulters,  amounting  to about  Rs. 2.69 lakh  crore  funded exposure.  The Securitisation and Reconstruction  of Financial  Assets and Enforcement  of Security  Interest (SARFAESI)  Act has been amended  to make  it more  effective.  Further,  six new  Debts Recovery  Tribunals have been established  to expedite  recovery.

- (c):  RBI  has  informed   that   as  per  the  provisions   of  section   45E  of  the  Reserve   Bank of India Act,  1934, RBI is prohibited  from  disclosing  credit  information, which  shall  be treated as confidential  and not be published  or otherwise  disclosed.

(e): As per RBI instructions, banks  are required  to have a loan  recovery  policy,  which  may cover, inter alia, negotiated  settlements  of NPAs.  As per inputs  received  from  PSBs, all PSBs have One Time  Settlement  (OTS)  schemes, in pursuance  of their  Board-approved  policies, which  are typically oriented  towards  sectors such as agriculture, Micro  Small  and Medium Enterprises (MSMEs),  weaker   sections and  education loans. As  per PSB  data  for OTS/compromise  in NPA  accounts  above Rs. 5 crore  outstanding,  Rs. 11,148 crore  were recovered  through  OTS/compromise  in FY 2017-18.

- (d):  Government  has not set up any  committee  in this regard.

RBI's Feb 2018 instructions  regarding  revised  framework  for resolution  of stressed assets provides   for  a  timebound   resolution   plan   approved   by   the  banks   against   the  defaulting entities   to  initiate   steps,  including   restructuring, to  cure   the  defaults.   The   new   framework for  restructuring is  not   applicable   to  the  micro,   small and  medium   enterprises   (MSMEs) with  loans  of Rs. 25 crore  or less.

- (f): Government   and  RBI  have  taken   a  number   of  measures   to  contain   NPAs,   as mentioned  in the reply  to part  (b). In addition,  under  the PSB Reforms  Agenda  announced by  the  Government,   PSBs  have  committed   to  clean  and  commercially prudent   business through  Stressed Asset Management  Verticals  for focussed recovery,  rigorous  due diligence and  appraisal   for  sanction   by   scrutinising group   balance   sheets,  at  least  10%  share  in consortium  lending,  ring-fencing  of cash flows,  initiating use of technology  and analytics  for comprehensive   due  diligence   across  data  sources,   building   capacity   for  techno-economic valuation,  clean and effective post-sanction  follow-up  on large-value  accounts  by  tying  up with  Agencies  for Specialised  Monitoring, and strict  segregation  of pre- and post-sanction roles for enhanced  accountability. For enabling  a clean credit  system  in future  and deterring economic  offenders from evading  the process of Indian  law  by  remaining  outside  Indian jurisdiction, Government   has  introduced   the  Fugitive   Economic   Offenders   Bill,   2018  to provide   for  attachment   and  confiscation   fugitive   economic   offender's   property   and  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  and to examine  all NPA  accounts  exceeding  Rs. 50 crore  from  the angle  of possible  fraud.

Annexure

## Lok  Sabha Unstarred  Question  no. 622, for  20.7.2018 Gross Non-Performing  Assets of Public Sector Banks

Amounts  in crore  Rupees

|        | Bank          | GrossNPA        | GrossNPA        | GrossNPA        | GrossNPA         |
|--------|---------------|-----------------|-----------------|-----------------|------------------|
| S. No. |               | As on 31.3.2015 | As on 31.3.2016 | As on 31.3.2017 | As on 31.3.201 8 |
| 1      | AllahabadBank | 8,358           | 15,385          | 20,688          | 26,563           |
| 2      | AndhraBank    | 6,877           | 11,444          | 17,670          | 28,124           |
| 3      | Bank ofBaroda | 16,261          | 40,521          | 42,719          | 56,480           |
| 4      | Bank ofIndia  | 22,807          | 49,879          | 52,045          | 62,328           |

| 5   | Bank ofMaharashtra         | 6,402   | 10,386   | 17,189   | 18,433        |
|-----|----------------------------|---------|----------|----------|---------------|
| 6   | CanaraBank                 | 13,040  | 31,638   | 34,202   | 47,468        |
| 7   | CentralBankof India        | 11,873  | 22,721   | 27,251   | 38,131        |
| 8   | Corporation Bank           | 7,107   | 14,544   | 17,045   | 22,213        |
| 9   | DenaBank                   | 4,393   | 8,560    | 12,619   | 16,361        |
| 10  | IDBI BankLimited           | 12,685  | 24,875   | 44,753   | 55,588        |
| 11  | IndianBank                 | 5,670   | 8,827    | 9,865    | 11,990        |
| 12  | IndianOverseasBank         | 14,922  | 30,049   | 35,098   | 38,180        |
| 13  | OrientalBankof Commerce    | 7,666   | 14,702   | 22,859   | 26,134        |
| 14  | Punjab&SindBank            | 3,082   | 4,229    | 6,298    | 7,802         |
| 15  | PunjabNationalBank         | 25,695  | 55,818   | 55,370   | 86,620        |
| 16  | SyndicateBank              | 6,442   | 13,832   | 17,609   | 25,759        |
| 17  | UCOBank                    | 10,186  | 20,908   | 22,541   | 30,550        |
| 18  | UnionBankof India          | 13,031  | 24,171   | 33,712   | 49,370        |
| 19  | UnitedBank ofIndia         | 6,553   | 9,471    | 10,952   | 16,552        |
| 20  | VijayaBank                 | 2,443   | 6,027    | 6,382    | 7,526         |
| 21  | StateBank ofIndia (SBI)    | 56,738  | 98,185   | 1,12,343 | 2,23,427      |
| 22  | StateBank ofBikaner&Jaipur |         |          |          | Merged in SBI |
|     |                            | 2,945   | 3,603    | 10,677   |               |
| 23  | StateBank ofHyderabad      | 4,985   | 6,591    | 18,212   |               |
| 24  | StateBank ofMysore         | 2,136   | 3,636    | 9,915    |               |
| 25  | StateBank ofPatiala        | 4,360   | 6,767    | 17,847   |               |
| 26  | StateBank ofTravancore     | 2,357   | 3,200    | 8,817    |               |
| 27  | BhartiyaMahilaBank         | 0       | 1        | 55       |               |