DailyO: National: Wednesday, December 06, 2017.
A disquieting
report on the state of the public sector banks in India acting to further what
can only be looked at as "crony capitalism" has come to fore. The
Indian Express has reported that PSU banks have written off loans worth Rs
55,356 crore in the last six months alone, a 54 per cent jump in the amount
written off around this time last year, which stood at Rs 35,985 crore. The
loan write-off is being posited as banks trying to balance their books and
clean them up by indulging in a bit of "harmless" financial jugglery.
The report
states: "Figures obtained by The Indian Express from the RBI through the
Right to Information (RTI) Act for the last decade show that banks had written
off Rs 2,28,253 crore in nine years - from fiscal 2007-08 to 2015-16. The
central bank did not provide data for the subsequent period. Separately,
responding to a questionnaire from The Indian Express, ICRA said that
write-offs amounted to Rs 1,32,659 crore in 2016-17 and the first six months of
2017-18. This means the total write-off in the last 10 years is now over Rs
3,60,000 crore."
Though the
RBI had earlier clarified that writing-off non-performing assets (NPAs) isn't
the same as waiving them off, and loans can still be recovered even as the
banks "clean up" their balance sheets for better financial credit
rating in future, that explanation has been criticised by many in the
Opposition as well as those observing the banking sector up close. They have
latched on to the issue.
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