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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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