Thursday, June 14, 2018

Rs 1.44 lakh crore: That’s the record bad loan write-off by banks in 2017-18. Who is the BJP/RSS government working for?

WEIGHED DOWN by huge losses and non-performing assets (NPAs), banks have written off a record Rs 1,44,093 crore of bad loans in the financial year ending March 2018 — up 61.8 per cent from Rs 89,048 crore in the previous year. The total loan write-off by private and state-owned banks in the last 10 years since 2009 has touched a whopping Rs 4,80,093 crore as on March 31, 2018 – 83.4 per cent of this amount, or Rs 400,584 crore, was from public sector banks, according to figures compiled by rating agency ICRA for The Indian Express. Of the write-off for 2017-18, Rs 1,20,165 crore loans were written off by public sector banks.

Banks normally resort to write-offs in the case of loans which are in the doubtful recovery category. “It is technical in nature. It’s a book adjustment. When a bad loan is written off, it goes out of the books of the bank. The bank will also get tax benefits. However, the bank will continue the recovery measures even after the loan is written off,” said Pradeep Ramnath, former chairman and MD of Corporation Bank. The last financial year was also the worst for the sector as banks were forced to stop evergreening of bad loans and go for NPA recognition amid huge losses to their government securities portfolio following the rise in bond yields… read more: