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Reduction in NPAs due to write off by Public Sector Banks from 2014-18

Aug 07, 2018: The details of reduction in Non Performing Asset (NPA) due to write off (including compromise) from 2014-15 to 2017-18 in respect of Public Sector Banks (PSBs) as reported by Reserve Bank of India (RBI) is given in Annexure I.

Asset Quality Review (AQR) carried-out in 2015 for clean and fully provisioned bank balance-sheets revealed high incidence of Non-Performing Assets (NPAs). Expected losses on stressed loans, not provided for earlier under flexibility given to restructured loans, were reclassified as NPAs and provided for. PSBs initiated cleaning up by recognising NPAs and provided for expected losses. Primarily as a result of AQR and subsequent transparent recognition, the gross NPAs of PSBs increased by Rs. 6,16,586 crore between March 2015 and March 2018 (provisional data), as per the RBI data.

As per RBI guidelines and policy approved by bank 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. Thus, the amounts written off during recent financial years are substantially on account of such stressed loan accounts of earlier years, which have been transparently recognised following AQR and fully provisioned. Banks write-off NPAs as part of their regular exercise to clean up their balance-sheet,tax benefit and capital optimisation. Borrowers of such written-off loans continue to be liable for repayment. Recovery of dues takes place on ongoing basis under legal mechanisms, which include, inter alia, the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, and Debts Recovery Tribunals. Therefore, write-off does not benefit the borrower.

The details of reduction in NPA due to write-off (including compromise) for agriculture and allied activities during the year 2016-17 and 2017-18 in respect of Public Sector Banks (PSBs) as reported by RBI is given in Annexure II. RBI has reported that the details prior to year 2016-17 are not available.

Annexure I
Reduction in NPAs due to write off by Public Sector Banks from 2014-18

ANNEXURE - I

(Rs. in crores)

Name of Bank/ Bank Group

Reduction in NPAs-due to write off (including compromise)

FY 2014-15

FY 2015-16

FY 2016-17

FY 2017-18

ALLAHABAD BANK

2,109

2,126

2,442

3,635

ANDHRA BANK

1,124

814

1,623

1,666

BANK OF BARODA

1,563

1,554

4,348

4,948

BANK OF INDIA

866

2,374

7,346

8,976

BANK OF MAHARASHTRA

264

903

1,374

2,460

BHARATIYA MAHILA BANK LTD.

0

0

0

0

CANARA BANK

1,472

3,387

5,545

8,310

CENTRAL BANK OF INDIA

1,386

1,334

2,396

2,924

CORPORATION BANK

779

2,495

3,574

8,228

DENA BANK

515

760

833

661

IDBI BANK LIMITED

1,609

5,459

2,868

12,515

INDIAN BANK

550

926

437

1,606

INDIAN OVERSEAS BANK

2,087

2,067

3,066

6,908

ORIENTAL BANK OF COMMERCE

925

1,668

2,308

6,357

PUNJAB AND SIND BANK

263

335

491

460

PUNJAB NATIONAL BANK

5,996

6,485

9,205

7,407

STATE BANK OF BIKANER AND JAIPUR

363

643

1,560


STATE BANK OF HYDERABAD

355

1,204

1,430


STATE BANK OF INDIA

21,303

15,955

20,339

39,151

STATE BANK OF INDORE





STATE BANK OF MYSORE

740

588

161


STATE BANK OF PATIALA

755

1,156

3,528


STATE BANK OF TRAVANCORE

456

398

556


SYNDICATE BANK

1,055

1,430

1,271

2,400

UCO BANK

0

1,573

1,937

2,735

UNION BANK OF INDIA

931

792

1,264

3,477

UNITED BANK OF INDIA

761

649

714

1,867

VIJAYA BANK

791

510

1,068

1,539

Total - Public Sector Banks

49,018

57,585

81,683

1,28,229

Source: RBI






Annexure II
Agriculture farm loan write off by Public Sector Banks 2014-2018

ANNEXURE - II

(Rs. in crore)

Bank Name/

Agriculture and Allied Activities

Reduction in NPAs- due to Write-offs (including compromise) during

FY 2016-17

FY 2017-18

ALLAHABAD BANK

442

367

ANDHRA BANK

93

143

BANK OF BARODA

754

588

BANK OF INDIA

121

1,332

BANK OF MAHARASHTRA

142

55

BHARATIYA MAHILA BANK LTD.



CANARA BANK

484

797

CENTRAL BANK OF INDIA

156

301

CORPORATION BANK

112

155

DENA BANK

1

6

IDBI BANK LIMITED

144

105

INDIAN BANK


54

INDIAN OVERSEAS BANK

33

493

ORIENTAL BANK OF COMMERCE

1

760

PUNJAB AND SIND BANK

5

0

PUNJAB NATIONAL BANK

197

558

STATE BANK OF BIKANER AND JAIPUR

714


STATE BANK OF HYDERABAD

237


STATE BANK OF INDIA

2,905

2,972

STATE BANK OF MYSORE

157


STATE BANK OF PATIALA

35


STATE BANK OF TRAVANCORE

3


SYNDICATE BANK

133

195

UCO BANK

13

96

UNION BANK OF INDIA

56

1,133

UNITED BANK OF INDIA

120

113

VIJAYA BANK

34

122

Total - Public Sector Banks

7,091

10,345

Source: RBI




Note: Write-offs are done after full provisioning, and as per RBI’s guidelines and policy approved by bank 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. Further, the process of recovery of dues from the borrower in such loan accounts continues and, therefore, the write-off does not benefit the borrower.


This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in a Written Reply to a Question in Rajya Sabha today(7Aug2018).



Source: Ministry of Finance

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