Banks write off record bad loans worth over Rs 1.44 lakh crore during FY17-18, says report
Updated : June 15, 2018 12:42 PM IST
The total amount written off by banks in the country since 2009 is Rs 4,80,093 crore.
The last financial year was also 'the worst for the sector as banks were forced to stop ever greening of bad loans.
CNBC-TV18
Banks in India wrote off a record Rs 1,44,093 crore of bad loans in the last financial year, reported The Indian Express. The amount was over 60% higher than the amount waivered during the preceding financial year.
The report said that the total amount written off by banks in the country since 2009 is Rs 4,80,093 crore. Of this, nearly 85% was written off by public sector banks, the report said based on figures by the rating agency ICRA.
"Banks usually write off loans which are not recoverable. Borrowers are not informed about the write-off. Once a loan is written off, it's not counted as non-performing asset (NPA). When recovery happens, it will add to the profits of the bank," CEO of a public sector bank was quoted saying in the report.
The report said that the last financial year was also 'the worst for the sector as banks were forced to stop ever greening of bad loans and go for NPA recognition amid huge losses to their government securities portfolio following the rise in bond yields.'
According to the critics of the policy, the writing off creates 'non-transparency, destroys the credit risk management system and brings all types of wrongdoings into the system,' the report said.
Tags economy Finance ICRA Indian banks NPA
Mentoring young civil servants is the need of the hour