This has been written off that almost four-fifth of the total loan amount written off in the last 10 years, have increased in the last five years since April 2014. The RBI revealed that the total loan written off in the last five years since April 2014 amounted to Rs 5,55,603 crore, The Indian Express reported in a reply to the application.
In response to an application filed by The Indian Express, the RBI revealed that a loan of Rs 5, 55,603 crore was released after April 2014. In order to show lower their bad loans, the banks have made a loan of Rs 1, 08,374 crore in 2016-17 and Rs 161,328 crore in 2017-18. In the first six months of 2018-19, the banks restored loan of Rs 82,799 crore. In the October-December 2018 quarter, the volume reached at Rs 64,000 crore.
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However, the authorities do not have any information about the people who were booked. While banks claim that the recovery measures continue even after loans are written off, sources said not more than 15-20% is recovered and the write-off figures every year are rising, much faster than recoveries and recapitalization.
Neither the banking sector nor the RBI discloses the identity of borrowers whose loans are written off by banks. However, the Bank unions have long been demanding government to publicize the names of defaulters but the country don’t get the names of such defaulters yet.
“Banks are required to extinguish all available means of recovery before writing off any account fully or partly. It is observed that some banks are resorting to technical write-off of accounts, which reduces incentives to recover. Banks resorting to partial and technical write-offs should not show the remaining part of the loan as standard asset,” the RBI had said in an earlier circular to banks.
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Last year, the government had announced a recapitalization programme of Rs 2.11 lakh crore to bail out banks which are now stuck with over Rs 10 lakh crore NPAs.
“It is known that bulks of these bad loans are attributable to big businesses and the affluent. Many cases of default are found to be deliberate, willful and on account of diversion of funds. Unfortunately bank loan default is still a civil offence and hence criminal proceedings are not being instituted against them,” AIBEA general secretary C H Venkatachalam said.