Bank recoveries fail to maintain pace with huge write-offs: Report

Constitute nearly 1/3rd of total write-offs in some cases; SBI's recovery stood at Rs 11,566 crore against a write off of Rs 41,641 crore in ten years, The Indian Express reports

Amid debate over huge write-off of loans by public sector banks (PSBs), recoveries by lenders has been very sluggish, in some cases almost one-third of the amount written off, The Indian Express reported on Monday, citing reply to a Right to Information (RTI) application.  In fact, the number falls to 13% of the total bad loans in some cases
 
State Bank of India (SBI), the country’s largest lender, wrote off over Rs 41,641 crore between FY06 and FY15. However, it recovered only Rs 11,566 crore during this period — just 27% of the total bad loans, the report said.
   
In the last three years, the lender’s write-offs jumped nearly four times as it declared loans worth Rs 30,231 crore as NPAs. The recoveries corresponding to that were just at Rs 4,927 crore or 16% of the bad loan.
 

Meanwhile, Bank of India faced a shortfall of Rs 14,000 crore in recovery, as it wrote off Rs 41,361 crore since 2009 — a figure that could be higher than SBI if considered for a 10-year period.
 
SBI and Bank of India wrote-off nearly Rs 83,000 crore in the last ten years, whereas, for 14 other PSBs, the number stood at Rs 44,850 crore. 
 
Some banks like Canara Bank, Indian Overseas Bank, Indian Bank and UCO Bank did not provide information, stating that they were exempted from the ambit of RTI.
 
Write-offs by banks came into spotlight when a report by the newspaper stated that PSBs had written off nearly Rs 1,14,000 crore in the last three years, prompting the Supreme Court to seek a list of defaulters, owing more than Rs 500 crore, from the Reserve Bank of India (RBI).
 
The court is likely to hear the matter again on April 12. It will take up RBI’s plea to keep the names on this list confidential.