(a) the details of the amount of Non-Performing Assets (NPAs) of various banks written off in the country during the last five years, bank-wise;
(b) whether the evaluation of ill-effects of the said exercise on the economy has been carried out;
(c) if so, whether the economy slowed down as a result of the said write off; and
(d) if so, the details thereof including the loans taken by the farmers and traders in the said NPA?
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(a) to (d): As per data of the Reserve Bank of India (RBI), 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, the primary reasons for the spurt in stressed assets have been observed to be, inter-alia, aggressive lending practices, wilful default / loan frauds /corruption in some cases, and economic slowdown. Asset Quality Review (AQR) initiated in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non Performing Assets (NPAs). As a result of AQR and subsequent transparent recognition by banks, stressed accounts were reclassified as NPAs and expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were provided for. Further, all such schemes for restructuring stressed loans were withdrawn. Primarily as a result of transparent recognition of stressed assets as NPAs, gross NPAs of SCBs, as per RBI data on global operations, rose from Rs. 3,23,464 crore as on 31.3.2015, to Rs. 10,36,187 crore as on 31.3.2018, and as a result of Government’s 4R’s strategy of recognition, resolution, recapitalisation and reforms, have since declined by Rs. 97,996 crore to Rs. 9,38,191 crore as on 30.6.2019.
As per RBI guidelines and policy approved by bank Boards, non-performing loans, 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 balance-sheet, avail of tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their Boards. 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. Bank-wise details of NPAs written-off by SCBs for the last five financial years are at Annexure 1.
The Gross Domestic Produce for the Indian economy has grown at an average annual growth rate of 7.5% over the last five years, with growth rate of 6.8% (provisional estimates) in the financial year 2018-19, enabled by growth in gross advances of SCBs of an average of 9.3% over the last five years and growth of 13.3% in the financial year 2018-19. Details in this respect are at Annexure 2.
As per RBI data, the details of loans of SCBs in their global operations that were written-off and pertain to “Agriculture and allied activities” and “Services—Trade” are at Annexure 3.
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