Rs. 2.4 Lakh crore loans written off in over 3 Years, Mamata Banerjee slams Government

Mangalore Today News Network

New Delhi, Apr 04, 2018 : Public sector banks (PSBs) wrote off Rs. 2.41 lakh crore worth of loans in over three years, between April 2014 and September 2017. This was disclosed by minister of state for finance Shiv Pratap Shukla said in a written reply in Parliament on Tuesday. The disclosure came under strong criticism from Bengal chief minister and Trinamool Congress chief Mamata Banerjee. "I am shocked to see that at a time, when the farmers in the country are crying and committing suicide for their loan burden and asking for waiver of farmers’ loan, the Government of India have not even considered that," the West Bengal chief minister said in a Facebook post.

 

In his reply to the Rajya Sabha, the union finance minister of state said that writing off non-performing assets (NPAs) or bad loans is a regular exercise conducted by banks to clean up their balance sheet and to achieve taxation efficiency.

"As per Reserve Bank of India (RBI) data on global operations, public sector banks have written-off (including compromise) an amount of Rs. 2,41,911 crore from financial year 2014-15 till September 2017," the minister said.

Borrowers, however, continue to be liable for repayment despite the write-off, the minister added.

Mr Shukla said the recovery of dues takes place on an ongoing basis under a legal mechanism so write-offs do not benefit borrowers.

The minister said also informed the Rajya Sabha that according to the Reserve Bank of India, borrower-wise credit information is not available for disclosure. The RBI Act provides that credit information submitted by a bank should be treated as confidential, he added. The non-disclosure of the borrower information was also criticised by the Bengal chief minister.

"Even in Parliament reply, the Government of India says that the details of credit information by a public sector bank cannot be disclosed," Ms Banerjee said.

The stressed-loan pile in the Indian banking system has more than doubled in the five years as a prolonged economic slowdown pressured companies’ ability to service their loans, while in some cases profligate lending practices and fraudulent transactions have aggravated the problem. A Rs. 13,000-crore fraud in the second-biggest state-run lender Punjab National Bank that was first disclosed in early February has stunned the country’s financial sector and has triggered a crackdown by regulators to unearth more such fraudulent deals.
According to the latest RBI data, 21 state-run banks which account for more than two-thirds of the country’s banking assets had as of December 31 stressed loans of Rs. 8.26 lakh crore, or 15.8 per cent of their total loans.


courtesy: NDTV