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Two public sector lenders — IDBI Bank and State Bank of India (SBI) group — wrote off more loans than what they recovered from borrowers in financial year 2013-14, according to finance ministry data.
Public sector bank (PSB) executives said the write-off indicates cancellation from an account of a bad debt or worthless asset. The provisions are made for such accounts in line with regulatory norms.
The overall performance of PSBs on recoveries was better in 2013-14. PSBs as a group recovered Rs 34,306 crore in FY14 while cancelling loans worth Rs 25,310 crore from books. The recoveries were higher by Rs 8,995 crore over write-offs.
For IDBI Bank, a Mumbai-based public sector lender, total cash recoveries from non-performing loans and written-off accounts stood at Rs 896 crore. It wrote off loans worth Rs 1,392 crore in FY14.
SBI group wrote off loans worth Rs 8,971 crore in 2013-14, while total recoveries (cash and from written-off accounts) stood at Rs 8,317 crore in the same period. The write-offs were higher by Rs 654 crore than recoveries in the case of the country’s largest commercial banking group.
“The write-off does not absolve borrower from paying dues. Obligation to repay remains intact. The banking group will use all legal means to recover," an SBI executive said.
