Lok Sabha Question No. 1083 (UNSTARRED), answered on 2021-07-26
Subject: NPAs of PSBs
Ministry: FINANCE
Asked by: Balubhau (Alias Suresh Narayan) Dhanorkar, Kaushalendra Kumar, Kani K. Navas

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO-1083

ANSWERED ON- 26/07/2021

## NPAs OF PSBs

## 1083. SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR SHRI KAUSHALENDRA KUMAR SHRI K NAVASKANI

Will the Minister of FINANCE be pleased to state:-

- whether the Non-Performing Assets (NPAs) incurred by all Public Sector Banks (PSBs) have increased the last six years; during
- (6) if so, the reasons therefor;
- (c) if not; the details of Gross and Net NPAs of all PSBs, year-wise since 2014;
- (d) whether the Government has any plan to control the increasing NPAs and also to recover it from lenders; and
- (e) if the details thereof including the losses of PSBs the last six years? during SO,

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(DR: BHAGWAT KARAD)

(a) to (e): As per Reserve Bank of India (RBI) data, aggregate gross advances of sector banks (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, aggressive practices during this with wilful default loan frauds corruption in some cases, economic slowdown etc were observed to be primary reasons for the spurt in the stressed assets. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of NPAs. As a result of AQR and subsequent   transparent recognition by banks; stressed accounts were   reclassified as expected losses on stressed ioans, not provided for earlier under flexibility given to restructured were provided for: Furthet;, all such schemes for restructuring stressed loans were withdrawn in the financial year (FY) 2017-18. Primarily as a result of transparent recognition of stressed assets as NPAs; as per RBI data on global operations, NPAs of PSBs rose from Rs: 2,16,739 crore on 31.3.2014 and Rs. 2,79,016 crore on 31.3.2015, to Rs. 5,39,968 crore on 31.3.2016, Rs. 6,84,732 crore on 31.3.2017, and peaked at Rs. 8,95,601 crore on 31.3.2018, and as a result of Government's (provisional data) The net NPAs have displayed a similar trend, increasing initially from Rs: 1,24,095 crore On 31.3.2014 to Rs: 2,14,549 crore on 31.3.2015,Rs. 3,24,372 crore on 31.3.2016, Rs 3,82,087 crore on 31.3.2017 and peaking at Rs. 4,54,221 on 31.3.2018,and declining thereafter to Rs 2,84,689 (provisional data) public period along lending loans, gross

Throughout this period, PSBs continued to post aggregate operating of Rs. 1,37,151 crore, Rs 1,58,994 crore, Rs 1,55,603 crore; Rs 1,49,819 crore, Rs 1,74,640 crore in the financial 2015-16, 2016-17,2017-18, 2018-19 and 2019-20 respectively: However; primarily due to continuing ageing provision for NPAs, made aggregate provision for NPAs and other contingencies of Rs. 1,55,226 crore, Rs: 1,70,371 crore and Rs. 2,00,404 crore respectively in the said years; resulting in aggregate net losses of Rs; 17,993 crore; Rs 11,389 crore; Rs. 85,370 crore, Rs. 66,636 crore and Rs. 25,941 crore respectively and returning to profitability thereafter with aggregate net of Rs. 31,820 crore in FY2020-21. profits year they profit

At the same time comprehensive steps were taken to control and to effect recovery in NPAs; which enabled PSBs to recover Rs. 5,01,479 crore over the last six financial The steps taken include the following: years:

- 2) The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest 2002 has been amended to make it more effective, with provision for three months" imprisonment in case the borrower does not provide asset details, and for the lender to possession of mortgaged property within 30 Act, days: get
- (1) in credit culture has been effected; with the Insolvency and Bankruptcy Code (IBC) fundamentally   changing the creditor-borrower relationship, away control of the defaulting   company from   promoters/owners, and debarring wilful defaulters from the resolution process To make the process more stringent; personal guarantor to corporate debtor has also brought under the ambit of IBC Under IBC; resolution plans have been approved in 394 cases up to June 2021, with Rs 2.45 lakh crore amount realisable by financial creditors. Change taking been
- (3) As per RBI instructions, wilful defaulters are not sanctioned any additional facilities by banks or financial institutions, and their unit is debarred from floating new ventures for five years
- (5) Jurisdiction of Debt Recovery Tribunal (DRTs) was increased from Rs 10 lakh to Rs: 20 lakh to enable the DRTs to focus on high value cases resulting in higher recovery for the banks and financial institutions. Six new DRTs have also been established to expedite recovery
5. Wilful   defaulters and  companies   with wilful defaulters as promoters; directors have been debarred from accessing markets to raise funds, vide Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2016. capital
6. With Government infusion supplementing the of by PSBs from market; PSBs have achieved a high provisioning coverage ratio of 83.79/ a8 On 31.3.2021, equipping them to take decision on resolution of NPAs without constrained on account of such decision impacting their profitability: raising capital being
7. Stressed Asset Management Verticals were set up in banks for focused   slippage prevention,  recovery arrangement and time-bound action in respect of  large-value stressed assets:
8. reforms have been instituted in PSBs a8 part of the Public Sector Banks Reforms Agenda, including, inter alid, the following: Key
9. loan policies of PSBs mandate tying up necessary clearances; 'approvals and linkages before disbursement, scrutiny of group balance-sheet and -fencing of cash flows, non-fund and tail risk in project financing: appraisal
10. (iv) Monitoring has been strictly segregated from sanctioning roles in high-value loans; and specialised monitoring combining financial and domain knowledge have been deployed for effective monitoring of loans above Rs: 250 crore: agencies
11. () Use of third-party data sources for comprehensive due diligence across data sources has been instituted, thus mitigating risk on account of misrepresentation and fraud:
12. To ensure timely and better realisation in one-time settlements (OTSs), end-to-end OTS platforms have been set up in PSBs