//17 Nov 2013
“In the last 13 years, banks have written off 1 lakh crore and 95% of these are large loans. Everyone talks of the farm loan write-off, but it is the medium and large enterprises segment that has a 50% share in NPAs,” said Chakrabarty.
Chakrabarty also raised the issue of restructured loans—advances where potential defaulters are given more time to repay without being called defaulters. “Restructuring of loans with retrospective effect has killed credit quality in banks,” he said. He warned banks that the leeway might not be available in future.
RBI numbers showed that the banks added Rs 4,94,836 crore to their bad loans between 2007 and 2013. During the same period, they reduced NPAs to the extent of Rs 3,50,332 crore. This was possible because loans worth Rs 1,41,295 crore were written off and another Rs 90,887 crore were upgraded to repaying loans and Rs 1,18,149 crore was recovered from defaulters. According to Chakrabarty, after a technical write-off, there is no incentive to pursue recovery.//
https://timesofindia.indiatimes.com/business/india-business/Rs-1-lakh-crore-bad-loans-of-corporates-written-off-RBI/articleshow/25905990.cms
//
https://www.theguardian.com/world/2014/may/16/india-election-2014-results-live
https://m.economictimes.com/kc-chakrabarty-to-join-indiabulls-housing-finance-as-independent-director/articleshow/37928333.cms
//12 Feb 2016
WHAT HAPPENS TO THE ‘ASSET’?
But this write-off does not mean that the bank will not try to recover money from you. They might either try to continue to recover the money themselves or sell your loan to a recovery company. Your debt has been written off from a creditor’s book but not from its memory. You continue to owe them money.
HOW DOES IT HELP THE BANK TO REGISTER A LOSS?
So what advantages does a bank have in writing off your loan if it still intends to pursue you to recover it? One, it gives a true and fair picture of the ‘assets’ that are making money. After all, there is no point in having a huge asset base that doesn’t give any returns. And two, by writing off the loan the bank gets a tax break on the losses incurred.//
https://wap.business-standard.com/article-amp/finance/5-things-you-need-to-know-about-bank-write-offs-116021200192_1.html
//09 May 2016
More importantly, bankers’ attempts to blame the mammoth bad loans on the absence of a bankruptcy law is also disingenuous, given the flaws in the draft Bill; in fact, unless corrected, that legislation too will go the way of the SARFAESI Act which had been touted as the solution to bad loans. While the case has been adjourned to 19th July, the key issue today is to have a committee that will put facts and solutions on the table.
According to one estimate, PSBs need equity capital injection of Rs2.4 lakh crore by 2018 to meet the Basel-III norms; this is not going to be raised through a sale of equity to the public, unless their financial performance improves dramatically.
However, one crucial issue is missing from this list. It is the massive ‘technical write-offs’ by PSBs which were dubbed the “biggest scandal of the century” by Dr KC Chakrabarty (ex-deputy governor of RBI and ex-chairman of Bank of Baroda and Punjab National Bank), in response to a query by Indian Express on the bad loan issue.
In the past two decades, banks have written off several lakh crores of rupees as technical write-offs. The Indian Express reported that Rs1,14,000 crore has been written off in the past three years alone. //
https://www.moneylife.in/article/loan-write-offs-is-the-biggest-scandal-of-the-century/46846.html
//02 Sep 2016
A whopping Rs 1.14 lakh crore of bad loans have been written off by 27 public sector banks (PSBs) during FY 2012-15, with the last fiscal alone witnessing a steep 53 per cent rise in write-offs as part of the balance sheet clean-up.
For the fiscal ended March 2015, public sector banks have written off loans amounting to Rs 52,542 crore, an increase of 52.6 per cent over the previous fiscal, as per the RBI data.
RBI Governor Raghuram Rajan recently announced a March 2017 deadline for banks to clean up their balance sheets, which are plagued by high incidence of bad assets.
While Mr. Rajan had assured that enough capital is available for public sector banks, he cautioned that some of the banks may witness erosion of profitability in the short run due to cleaning of books.//
https://www.thehindu.com/business/rs-114-lakh-crores-bad-loans-written-off-during-201215/article8209823.ece
//26 Feb 2018
Indian banks have restructured over Rs6 lakh crore (over $93 billion) in bad loans in the last three years, and unearthed over $1.8 billion of fraud in the last three weeks. And if you thought it couldn’t get worse, here’s more.
Nearly 30% of all bad loans in India may not be recovered—ever.
With about Rs10 lakh crore in non-performing assets (NPA), India was ranked fifth among 39 major economies for the most bad loans by Care Ratings in December 2017. Nearly 88% of this toxic pile belongs to state-run banks.
“Recapitalisation is required in any case. There is already a stock of NPAs and banks need money. The recapitalisation package is required to trigger reforms at PSU (public sector undertaking) banks,” Debroy said.
There is a growing clamour for the privatisation of government banks. Proponents of such a move include chief economic advisor Arvind Subramanian, industry lobby Assocham, and industrialist Adi Godrej, among many others.//
https://qz.com/india/1215364/modi-advisor-bibek-debroy-india-will-write-off-about-46-5-billion-of-bad-loans/
https://www.nytimes.com/2019/05/22/world/asia/india-election-results.html
//02 Aug 2019
Bad loans at banks reduced from their peak of 11.5 per cent in March 2018 to 9.3 per cent in March 2019, with rate of accretion of fresh NPAs dropping to 3.7 per cent in March 2019 compared with 7.4 per cent the previous fiscal, CRISIL data showed. Asset quality ratios improved for both, although higher write-offs too were partially responsible for the same.
“Slippages have been on the wane since last fiscal, with the rate of accretion of fresh NPAs halving in fiscal 2019; this is expected to drop further to ~3.2 per cent in fiscal 2020,” CRISIL said in a report.
However, the worry for the banking system is a gradual fall in recovery from accounts stuck in the bankruptcy process. Banks have recognised nearly Rs 17 lakh crore of stressed loans as NPAs since fiscal 2016, but recovery from these accounts have been very slow.
Former RBI Governor Urjit Patel in a recent lecture, his first after abruptly leaving the central bank in December last year, said that the dismal state of Indian banking was a failure on the part of banks, the government and the regulator until 2014 that got banks into the current bad-loan mess and the resultant low capital buffers.
The deterioration in asset quality can be traced to the credit boom of 2006-2011 when lending grew at an average rate of over 20 per cent.//
https://m.economictimes.com/markets/stocks/news/record-rs-2-54-lakh-crore-bad-loan-write-off-gives-a-facelift-to-banks-npa-profile/articleshow/70492369.cms
//20 Jan 2020
Prime Minister Narendra Modi’s flagship MUDRA scheme that aims to provide easy credit without collateral to small and micro-enterprises and, issues loans up to Rs 10 lakh under different categories, has generated an NPA of over Rs 17,000 crore in about four-and-a-half years since its inception, besides a loan write-off of about Rs 2 lakh crore.
To address such concerns, the RBI has introduced requirements such as liquidity coverage ratio and stress tests on the lines of banks, but economists including Modi government’s first chief Economic Advisor Arvind Subramanian have been demanding an asset quality review for NBFCs similar to banks.//
https://www.deccanherald.com/business/business-news/indian-banks-sitting-on-npa-cluster-bomb-ready-to-explode-after-march-31-796181.html
//07 Mar 2020
One of the biggest losers in case the RBI’s restructuring scheme for Yes Bank goes through will be the additional tier-I bond holders, who have bets totalling Rs 10,800 crore on the lender.
The investors in such instruments typically include mutual fund houses and bank treasuries, experts said.
“This is the first time in the history of Indian banks that tier-I bonds are being written down... the investors have to take a hit on both principal and the balance interest payments,” said Acuite Ratings president Suman Chowdhury. //
https://www.telegraphindia.com/business/yes-bank-tier-i-bonds-writeoff-by-rbi-hits-mutuals/cid/1751642
//10 March 2020
“Rana Kapoor, Director of Yes Bank Limited obtained undue pecuniary advantage from DHFL in the matter of investment in the debentures of DHFL by Yes Bank, through companies held by his wife and daughters,” the CBI FIR states. “It is also apprehended that Rana Kapoor has similarly (abused) his official position in several other transactions and obtained illegal kickbacks directly or indirectly through entities controlled by him or his family members.”//
https://indianexpress.com/article/india/yes-bank-crisis-cbi-searches-rana-kapoors-house-firm-linked-to-family-6307462/
//16 Mar 2020
When minister of state for finance Anurag Thakur started replying to the question, Gandhi and Congress leader in the House Adhir Ranjan Chowdhury protested, saying Union finance minister Nirmala Sitharaman, who was present in the House, should reply.
"The list of all bank defaulters above Rs 25 lakh loans is available on the website of the Central Information Commission. I have the list and if the Chair allows me, I am ready to table it in the House," he said.
Thakur said Rs 4.8 lakh crore defaulting loans were recovered ever since the Modi government came and a number of steps were taken, including enactment of the Fugitive Economic Offenders Act, so that the guilty can be punished.
He said there were many instances of irregularities during the UPA government and that include forcing bankers to buy paintings at exorbitant price -- in an indirect reference to Rahul Gandhi's sister Priyanka Vadra selling a painting to the Yes Bank founder Rana Kapoor, who was recently arrested.
The speaker then ended the Question Hour and moved to the next item of the agenda.
With this, Gandhi strongly protested saying he should be given the opportunity to ask the second supplementary as is the norm.//
https://timesofindia.indiatimes.com/business/india-business/rahul-gandhi-asks-government-to-name-50-top-wilful-defaulters/articleshow/74648992.cms
//17 Mar 2020
The ruling side said that the names of wilful defaulters had already been put up on the official website and also hit back at Gandhi by indirectly referring to the controversy over the sale of an MF Husain painting of his father, late PM Rajiv Gandhi, by his sister, Priyanka Gandhi Vadra, to the arrested Yes Bank founder Rana Kapoor. Later, Gandhi inadvertently referred to his “question about 500 top defaulters” at a press conference.
Minister of state for finance Anurag Thakur started answering by quoting data to argue that defaults and frauds pertaining to funds advanced by banks had come down during the Modi regime as compared to the erstwhile Congress-led UPA government.//
https://m.economictimes.com/news/politics-and-nation/lok-sabha-witnesses-noisy-scenes-over-rahul-gandhis-question/articleshow/74649755.cms
//27 Apr 2020
"I want to clarify that the winding up of the funds does not mean a write–off and investors will receive their money over a period of time depending on how we are able to liquidate maturities and the coupons we receive, etc.," Sapre said.
He added that the schemes could not generate cash-to-fund redemptions after the lockdown was extended as it drastically reduced the risk appetite of the market.
Sapre said that given the size of its Indian business, it was not possible for the fund house to provide liquidity support.//
https://www.moneycontrol.com/news/business/winding-up-of-funds-does-not-mean-write-off-of-investor-money-says-franklin-templeton-indias-sanjay-sapre-5192171.html
//28 Apr 2020
The write-offs are technical or prudential in nature, which means the banks have made 100 per cent provisions against the loans. However, this doesn’t mean the banks have given up the right to recover the loans. It also doesn’t mean that banks have written off the entire loan, as some loans have been taken against security, which either can be or already has been recovered.
As and when they recover the money, it directly adds up to banks’ profits, and the provisions also come down by that extent.
RBI maintains records of loans above Rs 5 crore given by banks, both fund and non-fund based, in its Central Repository of Information on Large Credits (CRILC) database. If any entity defaults, the RBI captures it.//
https://www.business-standard.com/article/finance/banks-wrote-off-rs-68-607-cr-debt-of-top-50-willful-defaulters-rbi-120042801692_1.html
//28 Apr 2020
"The RBI does not write off any loan since they do not lend to non govt or non bank entities, and this headline is not correct.That is a complete misunderstanding of how banking works. RBI doesn't give loans to companies, it lends only to banks and government. The author instead of saying banks have technically written off loans as per information provided under RTI by RBI, has said RBI has written off loans"
"Also, a technical write off is when a bank provides for dues when repayment is delayed. It doesn't mean that loan can't be recovered. Should banks recover the default amount, it is added to their profit and loss account", he explained.//
https://www.boomlive.in/fake-news/rbi-denies-reports-of-writing-off-loans-worth-rs-68000-crore-7864?fbclid=IwAR1Y7Aq57VS2FBXMtBD4WtwqDf5PyuymyPG-JeqBeuBCejEpqvLKancSx9E
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