New Delhi:
Scheduled commercial banks have written off loans amounting to Rs 10,09,511 crore in the past five financial years and the process of recovery of dues from the borrowers is continuing, Union Finance Minister Nirmala Sitharaman informed the Lok Sabha on Monday .
Nirmala Sitharaman said recovery of non-performing asset (NPA) accounts, including loan write-offs, was an ongoing process.
According to Reserve Bank of India (RBI) data, public sector banks have recovered Rs 4,80,111 crore, including Rs 1,03,045 crore of written-off loans, over the last five financial years, she said.
“According to inputs received from the RBI, scheduled commercial banks have written off an amount of Rs 10,09,511 crore over the last five financial years,” Nirmala Sitharaman said during question time.
The borrowers of written-off loans remain liable for repayment and the process of recovering borrower dues from written-off loan accounts continues, she added.
Banks continue to pursue recovery actions initiated in debited accounts through various recovery mechanisms available, Nirmala Sitharaman added.
Actions include filing suit in civil or debt collection courts, action under the Securitization 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, via negotiated settlement and compromise and sale of NPAs.
“Therefore, depreciation does not benefit the borrowers,” she said.
The minister said that under RBI guidelines and policies approved by the boards of banks, NPAs, including those fully provisioned after completion of four years, were removed from the affected bank’s balance sheet through write-off. .
Banks evaluate and consider the impact of write-downs as part of their regular exercise to clean up their balance sheets, leverage tax incentives and optimize capital, in accordance with RBI guidelines and policies approved by their boards of directors, she said.
Responding to a question, Nirmala Sitharaman said that the process of recovering money from small depositors and investors from loan defaulters was very complicated as the legal process was lengthy and there were multiple claimants to the seized assets, including banks and other financial institutions.
The minister said she was aware of the depositors going through extreme difficulties and there was a need to look into the matter and how to simplify the process.
Earlier, State Finance Minister Bhagwat Kishanrao Karad said that the names of loan defaulters were not disclosed due to RBI guidelines, but their names could be disclosed once their assets were put up for auction.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
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