Indian banks have written off bad loans or Non-performing assets (NPAs) worth Rs 660 thousand crore since 2014, as per the Reserve Bank of India data analysed by News Click. The amount of loans that were written off is equal to half of the total bad loans that were recorded in the banks’ financial books.
The data by Central Bank also shows that Rs 237,000 crores were written off from the financial books of the banks in financial year 2018-19 alone.
There was a sharp increase in the amount being written off which were often referred as technical write-offs by banks. This helped banks keep their books clean when they failed to recover the loans.
As per the RBI data, bad loans on the Indian bank’s financial books have experienced a steep rise ever since 2014, the year which also saw the Bharatiya Janata Party come to power.
In 2013-14, the bad loans were equal to Rs 205 thousand crore, which increased to a whopping Rs 1,173 thousand crore in 2018-2019. This startling rise in NPAs took place under the BJP, party that vowed to ‘take necessary steps to reduce NPAs in banking sector’ in the 2014 elections.
The bank fraud cases also rose drastically during the same period. Cases of more than Rs 1 lakh stood at 4,306 in 2012-13, and increased to 6,801 in 2018-19.
According to RBI’s annual report for 2018-19, the amount of money lost to bank frauds in March 2013 stood at Rs 10.2 thousand crore, which further increased to Rs 71.5 thousand crore in March 2018.
The repercussions of rising bad loans, NPAs and increasing cases of bank frauds has affected several depositors, the latest being the crisis at the private lender, Yes Bank.
In on of the biggest ever bank failures, Yes Bank collapsed, forcing RBI to impose a moratorium on March 5.
Several industry experts, analysts and bank employees’ unions have cited rising NPAs, written off bad loans, bank fraud cases for turbulences in the future of the Indian banking system.
Indian banks which claimed to have recorded high growth numbers in the past few quarters have been plagued with excessive bad loans or new non-performing assets.
State Bank of India, Axis Bank, Bank of Baroda, Punjab National Bank and several other top banks have reported a sharp increase in new NPAs or slippages in the December quarter, pointing at the continuous troubles of asset quality and credit risk associated with it.
According to a recent report by the Reserve Bank of India on Trend and Progress of Banking 2018-19, Indian lenders have the highest percentage of bad loans as against 10 emerging economies including Brazil, China, Indonesia, Philippines and Turkey.
Also Read: No Relief To Indian Banks As Bad Loans In Dec Quarter Continue To Rise
