Lok Sabha Question No. 974 (UNSTARRED), answered on 2019-02-08
Subject: Bad Debts
Ministry: FINANCE
Asked by: RAM TAHAL CHOUDHARY

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

## LOK SABHA UNSTARRED QUESTION NO: †974 TO BE ANSWERED ON THE 8 th  FEBRUARY,  2019/MAGHA  19, 1940  (SAKA)

## QUESTION Bad Debts

## †974: SHRI RAM  TAHAL CHOUDHARY:

Will  the Minister  of FINANCE  be pleased to state:

- (a) whether  the Public  Sector  Banks (PSBs) have successfully  recovered  their  bad debts, if so, the details thereof;  and

## ANSWER To be answered by

- (b) the amount  of debt written  off by  banks  during  the last three  years  along  with  the amount  recovered  out of it?

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

(a) and (b): As per Reserve  Bank of India (RBI) data on global  operations,  aggregate  gross advances of PSBs increased  from  Rs. 18,19,074  crore  as on 31.3.2008  to Rs. 52,15,920  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  balance-sheets  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 Further,  during  the financial  year  (FY) 201718, all  such schemes  for  restructuring stressed  loans  were   withdrawn. Primarily as  a  result of  transparent recognition  of stressed assets as NPAs,  aggregate  gross NPAs  of PSBs, as per RBI data on global  operations, rose from Rs.  2,79,016 crore   as  on  31.3.2015, to  Rs.  8,95,601 crore   as  on  31.3.2018, and  as  a  result of Government's  4R's strategy  of recognition,  resolution,  recapitalisation and reforms,  the aggregate  gross NPAs have since declined  to Rs. 8,64,433 crore  as on 31.12.2018 (provisional data).

Enabled  by  steps  taken   to  expedite   resolution,   including   the  change   effected  in  the  creditor-debtor relationship   through   enactment   of  the  Insolvency   and  Bankruptcy Code,   amendment   to  the  Securitisation and Reconstruction  of Financial  Assets and Enforcement  of Security  Interest  Act to make it more effective, establishment   of  six  new   Debts  Recovery   Tribunals,  and  strengthening of  recovery   arrangements   in  PSBs under the  PSB  Reform   agenda,   as  per  RBI data  on  global   operations,   since  the  initiation of  transparent recognition   in  FY 2015-16  till   December   2018  (as  per  provisional   data),   PSBs  successfully   recovered   an amount  of Rs. 3,33,491 crore.

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.  As per RBI data on global  operations,  PSBs wroteoff  Rs.  57,585  crore,   Rs.  81,683  crore,   Rs.  1,28,229   crore   during   FYs  2015-16,  2016-17,  and  2017-18 respectively. The process of recovery  of dues from the borrower  in written-off  loan  accounts  continues  and may extend  beyond   the  financial   year   in  which   the  account   is  written-off.   Therefore,   write-off   does  not benefit  the borrower.