At Rs 8 lakh crore, PSB write-offs more than double the capital infusion by govt, BFSI News, ET BFSI
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The highest infusion was in fiscal 2019 when rs 1.06 lakh crore were infused while in 2020-21, the government put in Rs 14,500 crore into four public sector banks.
The maximum write-offs were in fiscal 2019 at Rs 1.83 lakh crore, following by FY20 at Rs 1.75 lakh crore.
Reduction in non-performing assets due to write-offs for public sector banks stood at Rs 1,31,894 crore during fiscal 2020-21.
In FY2019-20, the number stood at Rs 1,75,877 crore, the RBI said
In the last seven years, bank credit to the industrial sector dropped to 28.9% in 2021 as compared to 42.7% in 2014. Credit to the retail sector grew from 16.2% to 26.3% in the last seven years.
The comparison
The loans write-off between 2015 and 2019 were more than three times compared to the figures of bad loans written off during the previous Congress-led UPA regime from 2004-2014, as per an RTI revelation.
During the UPA’s 10-year rule, around Rs2,20,328 crore was written off by various banks, and this figure shot up to Rs7,94,354 crore during the NDA regime from 2015-2019, resulting in a corresponding reduction in the banks’ NPAs.
The RTI reply figures around two-dozen public sector banks (PSBs), some three-dozen in the private sector, nine scheduled commercial banks, a four-dozen foreign banks, and several in each category not written off any loans.
Of the loan write-offs in the UPA decade (2004-2014), the PSBs accounted for approximately Rs 1,58,994 crore, while the private banks’ amounts were Rs41,391 crore and for foreign banks it was Rs 19,945 crore, with no write-offs by Scheduled Banks.
Later, in the NDA regime (2015-2019), the PSBs accounted for a stupendous Rs 6,24,370 crore loan write-off, with the private banks writing off Rs 1,51,989 crore and the foreign banks shared the remaining 17,995 crore, (Total—Rs7,94,354 crore), besides an additional write-off by scheduled banks totalling Rs 1,295 crore (Total – Rs 7,95,649 crore).
During the NDA rule, there was some recovery from the write-offs between 2015 and 2019— Rs 82,571 crore, or roughly 12% of the total Rs 7,94,354 crore, were written off.
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