Banks Loan Write-Off: In the financial year 2022-23, banks have written off a total loan of Rs 2.09 lakh crore. On the other hand, if we look at the figures of the last five years, a total loan of Rs 10.57 lakh crore has been written-off in the banking sector. The regulator of the banking sector, RBI has shared this information in response to RTI.
Disclosure in RTI
In an RTI reply to the Indian Express, RBI told that due to this loan write-off of banks, by March 2023, it has been successful in reducing the gross non-performing asset (GNPA) or the loan which has been defaulted, to a 10-year low of 3.9 per cent. According to the report, the gross NPA of banks was Rs 10.21 lakh crore in the financial year 2017-18, it has been brought down to Rs 5.55 lakh crore by March 2023.
According to the report, RBI has informed that since 2012-13 till now, banks have written off or written off loans worth Rs 15,31,453 crore. In response to RTI, RBI said that out of Rs 586,891 crore write-off done in the last three years, banks have been able to recover only Rs 109,186 crore. That is, only 18.60 percent of the loan written off can be recovered during this period.
If the loans written off by the banks are added, then the NPA of the banks increases from 3.9 per cent to 7.47 per cent. In 2022-23 where a loan of Rs 209,144 crore has been written-off. While a year ago, by March 2022, Rs 174,966 crore and by March 2021, banks had written off a loan of Rs 202,781 crore.
What is loan write off?
Write-off to the loan of banks is also called writing off the loan. Any person has the ability to repay the loan, yet he is not returning the loan to the banks, then the borrowers who do not repay the loan are called willful defaulters. Even after all the efforts and legal action, if the bank is not able to recover the loan from these people, then according to the rules of RBI, the bank writes off such loan. Means write off. Banks consider such loans as bad. First such loan is declared as NPA.
If NPA is not recovered, it is declared as write off. This does not mean that the loan has been forgiven. Write off means that it will not be mentioned in the balance sheet of the banks so that the balance sheet can be seen better. Despite the write off, the action of loan recovery continues from the bank.
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