42 Indian scheduled commercial banks (SCBs) collectively wrote off bad loans worth Rs 2.12 trillion worth in 2018-19, as per the data given by the union finance ministry in Parliament. This figure is 42 percent higher than the Rs 1.5 trillion written off the last year and constitutes about 20 per cent of all their non-performing assets (NPAs).
Banks generally omit NPAs off their books to make their balance sheets impressive with altered liabilities and potential losses. According to the Reserve Bank of India (RBI) guidelines, “non-performing loans, such including, those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off.”
Since 2014-15, from the time Narendra Modi-led government first came to power, India’s lenders have written off Rs 5.7 trillion worth of bad loans.
A far as the country’s 21 public-sector banks (PSBs) are concerned, the sum of bad loans taken off their balance sheets has augmented ever more over the years. In 2018-19, these banks wrote off Rs 1.9 trillion worth of bad loans, around 90 percent of the total for all SCBs, and four times higher of their own write-offs in 2014-15.