Finance Ministry Calls PSBs To Increase Write-off Accounts Recovery By 40%

Amidst the low recovery rate from written-off accounts, the Union Finance Ministry called the state-owned lenders to increase the account by 40 per cent, as per the media reports on Monday.

According to reports, currently, the recovery rate from written-off accounts is less than 15 per cent and public sector banks (PSBs) can recover only 14 per cent from the last five years, Rs 7.34 lakh crore as on March 2022.

Meanwhile, from the total Rs 7.34 lakh crore written-off loans, state-owned lenders recovered Rs 1.03 lakh crore, marking this that the net written-off stood at Rs 6.31 lakh crore at the end of March 2022. But sources claim, this level of recovery is not accepted once the write off banks recovery complacent is received from the non-performing assets (NPAs).

Besides, they add, higher recovery from written-off accounts is a direct addition to their bottom-line and improvement for their capital.

It further suggests that the department of financial services and senior officials of PSBs should review the situation and hold meetings to stock pending cases in regards to such accounts in various courts, including Debt Recovery Appellate Tribunal and Debt Recovery Tribunal.

Banks have been directed to actively take charge of the big written-off accounts as their bad loans on book hold Rs 11.17 lakh crore till the financial year 2021-22.

According to the RBI data, the write-offs by PSBs and private sector banks for the last six fiscals stand to an aggregate amount of Rs 8,16,421 crore and Rs 3,01,462 crore, respectively.

The write-offs are carried out by the banks in accordance with the RBI guidelines and policies approved by their boards.