Banks’ loans write-off: NDA scores three times over UPA, says RTI

In a dubious distinction of sorts, the Bharatiya Janata Party-led NDA rule achieved the highest loans write-off between 2015 and 2019, which is more than three times compared to the figures of bad loans written off during the previous Congress-led UPA regime from 2004-2014, as per an RTI revelation.

During the UPA’s 10-year rule, around Rs 2,20,328 crore was written off by various banks, and this figure shot up to Rs 7,94,354 crore during the NDA regime from 2015-2019, resulting in a corresponding reduction in the banks’ NPAs.

The data was provided under an RTI query by Pune-based businessman Prafful Sarda, giving some shocking insights into the state of affairs of not only public sector banks, but also those in the private sector and foreign banks.

The RTI reply figures around two-dozen public sector banks, some three-dozen in private sector, nine Scheduled Commercial Banks, and a whopping four-dozen foreign banks, and includes several in each category which have not written off any loans.

Of the loan write-offs in the Congress’ decade (2004-2014), the PSBs accounted for approximately Rs 1,58,994 crore, while the amounts written off by the private banks was Rs 41,391 crore and for foreign banks it was Rs 19,945 crore, with no write-offs by Scheduled Banks.

Later, in the NDA regime (2015-2019), the figures provided show a phenomenal increase with the PSBs accounting for a stupendous Rs 6,24,370 crore loan write-off, with the private banks writing off Rs 1,51,989 crore and the foreign banks shared the remaining 17,995 crore, (Total — Rs 7,94,354 crore), besides an additional write-off by Scheduled Banks totalling Rs 1,295 crore (Total – Rs 7,95,649 crore).

In a silver lining, however, during the BJP rule, there was some recovery from the write-offs between 2015 and 2019 — a paltry Rs 82,571 crore or roughly 12 per cent of the total Rs 7,94,354 crore written off, according to the RTI reply.

“The official data is not only revealing but very distressing. During the 10 years of UPA government (2004-2014), the total loans written off was Rs 2,20,330 crore, but during less than five years of the NDA (2015-2019), the figures zoomed up by almost 350 per cent to Rs 7,94,354 crore,” Sarda told IANS.

The surprising aspect is the huge increase in the write-offs by foreign banks — from 2004-2014, it was Rs 19,945 crore in the UPA’s 10-year tenure (Rs 1,995 crore each year on an average), but shot up to Rs 17,995 in the NDA’s four years between 2015-2019 (Rs 4,499 crore annual average).

Several global giants like HSBC, Barclays, CitiBank and Standard Chartered Bank apparently gained due to the write-offs, among many others, in the past 15 years of the UPA-NDA governments.

Sarda questioned why the government should permit such write-offs by the financially sound foreign banks instead of concentrating on the financial health of the Indian PSBs, private, scheduled and cooperative banks which directly concern a majority of the countrymen.

“In 2020, it seems we still follow the 1995 policies for loan recoveries or write-offs rather than innovating to ensure relief to the common masses instead of select corporate houses and bankrupt businessmen like Vijay Mallya, Mehul Choksi, Nirav Modi etc.,” Sarda said.

Worse — many of these bank defaulters are absconding since years and the government has also admitted that it has caught only two of the 72 fugitives in the past five years.