One in five banks sees a rise in loan write-offs in FY24

The remainder of the apical 10 banks bucked this trend, with Union Bank of India registering a 4.8 per cent alteration successful the magnitude of indebtedness write-offs to Rs 18,264 crore successful FY24, followed by State Bank of India with a 32.8 per cent alteration successful the indebtedness write-off magnitude to Rs 16,161 crore. The indebtedness write-off magnitude besides decreased for Bank of Baroda to Rs 10,518 crore, down 41.6 per cent from the erstwhile year, portion the aforesaid for Central Bank of India reduced by 2.5 per cent to Rs 10,001 crore.

The full magnitude of indebtedness write-offs has been Rs 9.90 lakh crore during the past 5 fiscal years 2019-20 to 2023-24. Barring a spike successful 2022-23, indebtedness write-offs person shown a declining inclination during these 5 years. The full magnitude of indebtedness write-offs by SCBs had stood astatine Rs 2.34 lakh crore successful 2019-20, which came down to Rs 2.03 lakh crore successful 2020-21 and Rs 1.75 lakh crore successful 2021-22. In the pursuing fiscal twelvemonth of 2022-23, the magnitude of indebtedness write-offs accrued to Rs 2.08 lakh crore, earlier coming down to Rs 1.70 lakh crore successful FY24.

“Banks write-off non-performing assets, including, inter-alia, those successful respect of which afloat provisioning has been made connected completion of 4 years, arsenic per the Reserve Bank of India (RBI) guidelines and argumentation approved by banks’ Boards. Such write-off does not effect successful waiver of liabilities of borrowers and therefore, write-off does not payment the borrower. The borrowers proceed to beryllium liable for repayment and banks proceed to prosecute betterment actions initiated successful these accounts,” Minister of State for Finance Pankaj Chaudhary said successful his written effect to a question successful the Lower House of the Parliament.

A slope writes disconnected a indebtedness aft the borrower has defaulted connected the indebtedness repayment and determination is simply a precise debased accidental of recovery. Once a indebtedness is written disconnected by a bank, it goes retired from the plus publication of the bank. A indebtedness becomes an NPA erstwhile the main oregon involvement outgo remains overdue for 90 days. The lender past moves the defaulted loan, oregon the non-performing plus (NPA), retired of the assets broadside and reports the magnitude arsenic loss.

Separately, information shared by the Ministry for 64 banks showed that gross NPAs stood astatine Rs 4.81 lakh crore arsenic connected March 31, 2024, with the highest magnitude of gross NPAs reported by State Bank of India astatine Rs 84,276 crore, followed by Punjab National Bank astatine Rs 56,343 crore. Gross NPAs had stood astatine Rs 5.72 lakh crore astatine the extremity of March 2023.

The magnitude recovered by SCBs including betterment from written-off loans stood astatine a three-year debased of Rs 1.23 lakh crore successful FY24, down 22.8 per cent from Rs 1.6 lakh crore successful FY23. The magnitude recovered by SCBs during 2019-20 was Rs 1.47 lakh crore, which moderated to Rs 1.14 lakh crore successful 2020-21 and had past accrued to Rs 1.37 lakh crore successful 2021-22.