A staggering Rs 1,14,182 crore was written-off in bad loans by public sector banks in the last three years as part of management of their non-performing assets (NPAs), Lok Sabha was informed today.
"Banks resort to write-off only after exhausting all other possible avenues for recovery or when the asset coverage is not enough. However, the bank is required to adhere to the guidelines issued by RBI on write offs of loans and its Board approved policy.
"The banks undertake write-off for Balance Sheet purposes i.E NPA management," said Minister of State for Finance Jayant Sinha in a written reply to Lok Sabha.
Banks either make full provision as per the RBI guidelines or write-off advances and claims such tax benefits.
"However, in case of written-off accounts, the recovery process continues," the minister added.
As per the detail provided in Lok Sabha, Rs 27,231 crore, Rs 34,409 crore and Rs 52,542 crore were written-off by state-owned banks during 2013, 2014 and 2015, respectively.
All the commercial banks taken together (including private banks) had written-off Rs 32,992 crore, Rs 42,235 crore and Rs 61,174 crore respectively during the three years.
Gross NPAs of public sector banks was Rs 3.60 crore at December end, up from Rs 2.67 crore at the end of March 2015.
In case of private banks, the Gross NPAs stood at Rs 38,396 crore at December 2015 end, up from Rs 31,576 crore at March end.
