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Indian Banks Write Off Loans Worth Rs 10.57 Lakh Crore In 5 Years, Rajya Sabha Informed

By LAWSTREET NEWS NETWORK      09 August, 2023 09:21 PM      0 Comments
Indian Banks Write Off Loans Worth Rs 10.57 Lakh Crore In 5 Years, Rajya Sabha Informed

Banks have written off loans worth Rs 10.57 lakh crore between financial years 2018-19 to 2022-23, in their bids to clean up their balance and avail tax benefits, Union Minister of State for Finance Bhagwat Karad informed Rajya Sabha on Tuesday.

The highest amount of loan written off during the five year period was in 2018-19 at Rs 2.36 lakh crore. In 2019-20 it declined marginally to Rs 2.34 lakh crore. In pandemic hit 2020-21, Rs 2.02 lakh crore loans were written off by scheduled commercial banks.

During the financial year ended March 2023, commercial banks wrote off Rs 2.09 lakh crore. The total loans written off between the financial year 2018-19 and 2022-23 stands at Rs 10,57,326 crore.

According to banking regulator RBI guidelines and policy approved by banks 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, the minister said in reply to a question by Rajya Sabha MP Jawhar Sircar.

Sircar, who represents Trinmool Congress Party in the upper house of parliament, said the loan write off during Prime Minister Narendra Modi government is the highest ever.

MoS Finance has replied for only 5 years here, but elsewhere he has given me figures for the remaining 4 years of Modi rule. The total write-off by banks in the last 9 years of this regime comes to Rs 14.51 lakh crore but the amount recovered after write-off comes to Rs 1.87 lakh crore, Sircar said.

This is our money lying in banks that Govt & RBI have directed banks to wipe out and adjust the loans of frauds without telling us, he alleged.

It is relevant to note the difference between write off and waive off of loans. Write-off has no direct impact on the borrower, as the debt still exists but is not considered collectable by the lender or creditor. Loan waiver provides relief to the borrower, as they no longer have to repay the portion of the loan that was waived off.



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