Staggering Rs 6.32 lakh crore bad debts written off by PSU banks in 8 years
- Unmesh Gujarathi
- Jun 26, 2021
MUMBAI: The Narendra Modi government which came to power, riding on heavy criticism against the former Congress government led by Dr.Manmohan Singh, alleging that the latter encouraged the loot of the public sector banks by letting off defaulting people in crores of rupees of loans.
It seems that under the present government the scene is not different, as a revelation obtained through right to information (RTI) shows in the past eight years, 12 Public Sector Undertaking (PSU) banks wrote off a whopping Rs 6.32 lakh crore of bad loans. They include Rs 2.78 lakh crore bad loans of big defaulters with borrowings of Rs 100 crore and above.
We spoke exclusively to RTI activist, Vivek Velankar of the Non-governmental organisation (NGO) Sajag Nagrik Manch who has under the RTI unearthed information on big nationalised banks large loan write-offs, exceeding Rs 100 crore each.
The information collated by Velankar shows that the Government was not at all interested in the recovery of bad loans from big defaulters, and has attempted to keep them from figuring in their Non-Performing Assets (NPAs) category thus ensuring that their books of accounts were clean.
The 12 top public sector banks include the State Bank of India (SBI), Bank of Maharashtra (BoM), Bank of Baroda (BoB), IDBI Bank, Punjab National Bank (PNB), Union Bank of India (UBI), Indian Overseas Bank (IOB), Central Bank of India, Canara Bank, Indian Bank, Bank of India and UCO Bank.
As per Velankar’s RTI compilation obtained over a period of several months, banks have written off amounts in various proportion. For example, his data shows that during the past eight-year period from FY12-13 to FY19-20, Canara Bank wrote off a total of Rs 47,310 crore while recovering just 19 per cent or Rs 8901 crore from defaulters.
However the biggest hit has been taken by SBI which has written off Rs 2,35,091 crore in the past eight years and the recovery has been only Rs 34,677 crore or just 15 %, followed by PNB which wrote off Rs 61,741 crore with a recovery of Rs 15,762 at 25%, the same figures for BOI which write off Rs 57,275 crore and recovered only Rs 13,560 crore.
According to Velankar it was a herculean task to obtain this information as the RTI information was not easily provided and he had to pursue it very hard since the PSU banks claimed that the information was confidential and that disclosing it would be a breach of privacy. He also encountered tremendous resistance to obtain names of big defaulters, with a bad loan of Rs 100 crore and above.
Another leading RTI activist from Mumbai also said that his attempts to seek the names of big defaulters from leading PSU banks were rejected time and again. "I have been trying to ask banks to reveal names of large loan defaulters but they refuse under one pretext or other, for reasons best know to them, this is not acceptable since its public money. We cannot force private banks who have also written off large amounts, but PSU banks are answerable to public."