PSB Announces Have Written-off ₹91,000 Crore In 9 Months Of FY23

Public sector banks (PSB) have written-off an amount of around Rs 91,000 crore in the first 9 months of the current fiscal year. This was stated in a data presented in the Rajya Sabha.

Another data informed that the PSBs managed to recover a little over Rs 1 out of Rs 5 in written-off accounts for the financial year 2022, thus picking up a pace of recovery from around 8 per cent in 2017-18 to a little over 21 per cent in FY22.

Union Finance minister Nirmala Sitharaman gave written bank-wise details of the written-off amounts with the State Bank of India on the top, followed by the Union Bank of India and Bank of Baroda with Rs 17,356 crore, Rs 16,497 crore and Rs 13,032 crore respectively. However, details about recovery for the current fiscal year have not been disclosed. 

The FM suggested that RBI guidelines and policies, which have been approved by bank boards and NPAs and includes those with full provisioning made on completion of four years, are removed from the balance sheet of the bank concerned by way of a write-off. 

Banks evaluating or considering the impact of write-offs is a part of their regular exercise of cleaning up their balance sheet, availing tax benefits and optimising capital, in accordance with RBI guidelines and policies approved by their boards. “Such write-off does not result in claiming of repaying liabilities of borrowers”, she reiterated.  

Sitharaman highlighted that as a borrower of written-off loans, it continues to be liable for repayment and the process of recovery of dues from the borrower is also carried, write-off does not benefit the borrower. 

She said banks are in a continuous process to pursue recovery actions initiated in written-off accounts through various available recovery mechanisms.

Meanwhile, in responding to another question, data provided along with a written answer by the Minister of state for Finance Bhagwat Karad, it was stated that all the scheduled commercial banks, PSBs, private banks and foreign banks had wrote-off around Rs 1.61-lakh crore worth of loan in the financial year 2018, while recovery from written-off accounts was less than Rs 13,000 crore which is a nearly 8 per cent of bad debts taken off from the book in the same year. 

For the next four fiscals, the percentage rose to 10.8 following 12.8, 14.9 and 19.4 per cent, respectively.