New Delhi, Apr 4 (DHNS): Public sector banks have written of Rs 2.42 lakh crore worth of bad loans under three years of Prime Minister Narendra Modi-led NDA government, Minister of State for Finance Shiv Pratap Shukla informed the Rajya Sabha.
The loans pertain to financial years 2014-2017.
"Writing off of non-performing assets is regular exercise conducted by banks to clean up their balance sheets and achieve taxation efficiency," he said in a written reply to a question.
But the loan write off news created a stir among the Opposition parties. Even before the latest update on the Rajya Sabha website, West Bengal Chief Minister Mamata Banerjee tweeted the question along with the minister's reply.
"This is the reality of what happens when the government says that it is only writing off loans, not waiving them off," CPI(M) General Secretary Sitaram Yechury tweeted.
Defaulters' info
Writing off loans is done for tax benefit and capital optimisation, the minister said, adding that the borrowers of such loans continue to be liable for repayment. The recovery of loan, in such cases, takes place under legal mechanism, which includes securitisation and reconstruction of financial assets and enforcement of Security Interest Acts, Debt Recovery Tribunals and Lok Adalats.
"Therefore, write off does not benefit borrowers," the minister said.
On making available the details of the borrowers, Shukla said, "the Reserve Bank of India has apprised that borrower-wise credit information is not available for disclosure under Section 45E of the RBI Act, 1934.