Lok Sabha Question No. 1130 (UNSTARRED), answered on 2021-07-26
Subject: Bad Loans
Ministry: FINANCE
Asked by: Rahul Ramesh Shewale, Pritam Gopinath Munde, Girish Bhalchandra Bapat

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## LOK SABHA UNSTARRED QUESTION NO-1130

ANSWERED ON-26/07/2021

## BAD LOANS

## 1130. SHRI RAHUL RAMESH SHEWALE DR PRITAM GOPINATHRAO MUNDE SHRI GIRISH BHALCHANDRA BAPAT

Will the Minister of FINANCE be pleased to state: -

- a) whether RBI has a very pOOr track record of forecasting bad loans and if the reasons therefor; SO,
2. whether India's banks are already reeling under one of the worst percentages of bad loans among the major economies and if so, the details thereof;
3. whether the Union Government has provided a moratorium On loans repayment in March; 2020 to provide relief to businesses amid pandemic and if s0, the details thereof; and
4. (d) whether NPA clock is still on the pause and if the details   thereof and the SO,

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(DR BHAGWAT KARAD)

- (a): The Reserve Bank of India (RBI) has that it conducts macro stress tests under various scenarios to assess the resilience of the banking sector and based on the same, it publishes results in Financial Stability Reports biannually: Further; such stress tests do not forecast banks' future performance under stress; rather; aim to identify the   impact on banks of a specific stress scenario, based on a number of  given assumptions, viz; gtowth in gross domestic product (GDP): goss fiscal deficit to GDP ratio, consumer index inflation weighted average lending exports to GDP ratio, etc. apprised they rate, price rate,
- (6) to (d): As per RBI data, 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, aggressive practices during   this with wilful   default/loan frauds / corruption in some cases, etc: were observed to be primary reasons for the spurt in the stressed assets. Review (AQR) initiated in 2015 for clean and   fully provisioned bank balance-sheets revealed high incidence of NPAs. As a result of AQR lending period along

and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed not for earlier under flexibility given to restructured loans, were provided for. Further; all such schemes for restructuring stressed loans were withdrawn in the financial year (FY) 2017-18 Primarily as a result of transparent cecognition of stressed assets as NPAs, gross NPAs ofSCBs,as RBI data on global operations, rose from Rs. 3,23,464 crore as on 31.3.2015, to Rs. per 10,36,187 crore on 31.3.2018, and as a result of Governments strategy of recognition, resolution; recapitalisation and reforms, have since declined to Rs. 9,33,779 crore on 31.3.2019, Rs. 8,96,082 crore as on 31.3.2020, and further to Rs. 8,34,902 crore (provisional data) as on 31.3.2021. provided loans,

RBI, vide circulars dated 27.3.2020 and 23.5.2020 on the COVID-19 Regulatory tted lending institutions to a moratorium of six months on payment of all instalments due between 1.3.2020 and 31.8.2020,in respect of all term loans and to defer the recovery of interest for the same in  respect of working facilities. grant permie falling capital period xxxxx