NEW DELHI: FM Nirmala Sitharaman on monday informed Parliament that debtors stay prone to pay off loans regardless of a write-off through banks.
“The borrowers of written-off loans continue to be liable for repayment, and the process of recovery of dues from the borrower in written-off loan accounts continues. Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available , such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the SARFAESI Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of NPAs. Therefore, write-off does not benefit the borrowers,” she stated, whilst replying to a query within the Lok Sabha.
Sitharaman stated that over the past 5 years, just about Rs 10.1 lakh crore were written off and banks had controlled to get well over Rs 1 lakh crore from those accounts. This was once a part of the restoration of Rs 4.8-lakh-crore made through state-run lenders.
The commentary got here amid repeated assaults through opposition events on “loan write-offs”, which the FM stated was once because of RBI tips and the insurance policies of the lenders. She stated that on final touch of 4 years, in relation to NPAs the place complete provisioning for doable losses has been made, banks can take away them from the steadiness sheet thru a write-off. “Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimize capital, in accordance with RBI guidelines and policies approved by their boards,” she stated.
“The borrowers of written-off loans continue to be liable for repayment, and the process of recovery of dues from the borrower in written-off loan accounts continues. Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available , such as filing of a suit in civil courts or in Debts Recovery Tribunals, action under the SARFAESI Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/compromise, and through sale of NPAs. Therefore, write-off does not benefit the borrowers,” she stated, whilst replying to a query within the Lok Sabha.
Sitharaman stated that over the past 5 years, just about Rs 10.1 lakh crore were written off and banks had controlled to get well over Rs 1 lakh crore from those accounts. This was once a part of the restoration of Rs 4.8-lakh-crore made through state-run lenders.
The commentary got here amid repeated assaults through opposition events on “loan write-offs”, which the FM stated was once because of RBI tips and the insurance policies of the lenders. She stated that on final touch of 4 years, in relation to NPAs the place complete provisioning for doable losses has been made, banks can take away them from the steadiness sheet thru a write-off. “Banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail of tax benefit and optimize capital, in accordance with RBI guidelines and policies approved by their boards,” she stated.