Lok Sabha Question No. 190 (UNSTARRED), answered on 2023-12-04
Subject: Waiving-off Loans
Ministry: FINANCE
Asked by: Abdul Khaleque, Mahesh Sahoo, Badruddin Ajmal

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

## LOK SABHA UNSTARRED QUESTION NO-190

ANSWERED ON MONDAY, DECEMBER 4, 2023/AGRAHAYANA 13, 1945 (SAKA)

## WAIVING-OFF LOANS

## 190.  SHRI ABDUL KHALEQUE SHRI MAHESH SAHOO SHRI M. BADRUDDIN AJMAL

Will the Minister of FINANCE be pleased to state:-

(a) the  amount  spent  on  waiving-off  loans  of  corporate  houses  and  the  total  amount  of  loan waived of during the last five years;

(b) the details year-wise along with the name of companies and firms with particular of amount for each one along with the details of the top ten beneficiaries both corporate and individual entities;

(c) the  reason  for  the  waivers  and  the  reason  for  the  Government  to  spend  huge  amount  on waiving off loans every year; and

(d) the  amount  of  money  collected  by  banks  and  other  lending  financial  institutions  as  penalty charges against delay in payment of loan?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

(a) to (d): As per the Reserve Bank of India (RBI) guidelines and policy approved by bank Boards, NPAs, 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. Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balancesheet, avail tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by  their  Boards.  Such  write-off  does  not  result  in  waiver  of  liabilities  of  borrowers  to  repay.  As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues  from  the  borrower  in  written-off  loan  accounts  continues,  write-off  does  not  benefit  the borrower.  Banks  continue  to  pursue  recovery  actions  initiated  in  written-off  accounts  through various recovery mechanisms available, such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of  Security  Interest  Act,  2002,  filing  of  cases  in  the  National  Company  Law  Tribunal  under  the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of non-performing assets. Further, Government does not spend any amount on such write-off of corporate loans.

RBI has apprised that information regarding the loan written-off in respect of corporate houses is not maintained by it. However, year-wise details of total write-off and loans written-off in respect of Large industries and Services during the last five financial years by SCBs are at Annex. With regard to the name of companies, RBI has informed that it is prohibited to disclose borrower-wise credit information under Section 45E of the RBI Act, 1934.

RBI  has  further  informed  that  the  amount  of  money  collected  by  the  banks  and  other  lending financial  institutions  as  penalty  charges  against  delay  in  payment  of  loan  is  not  maintained  by  it. However, as per RBI data, SCBs have collected an aggregate amount of Rs. 5,309.80 crore as penal charges, including penalty charges against delay in payment of loans, during the financial year 202223.

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Annex

## Lok Sabha unstarred question no. 190, regarding Waiving-off Loans Loans written-off by Scheduled Commercial Banks

(Amounts in crore Rs.)

| FY      | Total Written-off loans   | Written - off Loans (Large Industries and Services)   |
|---------|---------------------------|-------------------------------------------------------|
| 2018-19 | 2,36,265                  | 1,25,797                                              |
| 2019-20 | 2,34,170                  | 1,23,436                                              |
| 2020-21 | 2,02,781                  | 1,27,050                                              |
| 2021-22 | 1,74,966                  | 69,533                                                |
| 2022-23 | 2,09,144                  | 1,09,465                                              |

Source: RBI (provisional data for FY 2022-23)

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