Banks are reeling under the weight of huge losses and non-performing assets (NPAs), due to which banks have written off a record Rs. 1,44,093 crore of bad loans in 2017-18. In the previous year, the bad loans amounted to Rs. 89,048 crore. Of the total amount written-off in 2017-18, Rs. 1,20,165 crore were written off by public sector banks.
Since 2009, the total loan write-off by private and state-owned banks has reached a whopping Rs. 4,80,093 crore as on March 31, 2018. Out of this, Rs. 400,548 crore was from public sector banks.
Write-offs are done in those cases 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,” The Indian Express quoted former chairman and MD of Corporation Bank Pradeep Ramnath as saying.
Also read: PSU banks report Rs. 87,000 crore loss in FY 2018
In the financial year 2018, NPAs rose to Rs. 10.3 lakh crore compared to the previous year with Rs. 8 lakh crore.
Besides, of the 21 state-owned banks, 19 reported losses crossing a whopping Rs. 87,300 crore in 2017-18 fiscal. They collectively posted a net loss of Rs. 87,357 crore during the fiscal. Punjab National Bank (PNB) was the worst sufferer accounting for a loss of Rs. 12,282.82 crore after it was defrauded by diamond czar Nirav Modi and his uncle Mehul Choksi of more than Rs. 13,000 crore.