Mumbai: Congress’ Leader of Opposition in Lok Sabha Rahul Gandhi slammed the Bharatiya Janata Party-led Central government for the staggering Rs. 16-lakh-crore write-off by various national, private and urban cooperative banks, on Monday.
Speaking at a ‘Save Constitution Rally’ held in Mhow, Madhya Pradesh, Rahul Gandhi accused Prime Minister Narendra Modi of waiving off the massive amounts borrowed by big industrialists, “but did not write off the debts of poor farmers, labourers and students”.
The reference was to a report in ‘The Perfect Voice’ (“Banks recover crumbs from bad loans” - JAN. 23) highlighting RTI revelations on how Indian banks had written off over Rs. 16.61 lakh-crore of non-performing assets, while the recovery process was a measly 1.6 percent per annum of this amount.
“You work and toil, you pay the GST, but Chinese goods are sold in India courtesy big corporates here. The youth in China get jobs. Adani-Ambani get the profits while your children are deprived of employment opportunities,” thundered Rahul Gandhi.
He contended that “the peoples’ money is siphoned off from their pockets and lands into the coffers of Adani-Ambani”, raising questions ahead of the Budget Session of Parliament starting this week.
A RTI query by Pune-based businessman Prafful Sarda elicited shocking details of the loans written off by different banks, amounting to a whopping total Rs. 16,61,290-crore (NPAs) from various defaulters for 10 years.
These include around: Rs 12,08,621 crore (Public Sector Banks - PSBs); Rs 4,46,649 crore (Private banks); and Rs 6,020 crore (Urban Cooperative Banks - UCBs).
This was for a period of almost 10 years, from 2014-2015 till Sep. 2024, as per the RTI response to Sarda from the Reserve Bank of India (RBI)’s CPIO Nengneikim Guite.
Accordingly, the actual recovery notched for the last nearly 10 years was crumbs - just Rs 2,68,795 crore – comprising, Rs 2,16,547 crore (of PSBs); Rs 52,248 crore (of Private); though the figures of UCBs is not provided - leaving a huge pile of Rs. 13,92,495 crore, pending recovery.
“From the NPAs written-off (Rs. 16,61,290 crore), the recoveries amounted to an annual average of Rs 21,654 crore (PSBs); and Rs 522 crore (Private), working out to barely 16.17 percent for the last around 10 years. This gives an approximate annual average of a measly 1.6 percent recovery,” Sarda pointed out.
Quoting the RBI’s RTI reply, he added that a major chunk of the write-offs is due to ‘technical/prudential/Advances Under Collection’, but “the banks retain the right to recover from the borrowers in all such cases”.
“The government’s contention is that such write-offs are ‘purely balance sheet management’ strategy. Hence, the borrower’s liability to ‘repay’, or the bank’s right to ‘recover’ is not diminished in any manner. There are specialized teams which follow-up for the recovery processes thereafter,” said Sarda.
As per a 30-year-old policy of the government, all credit-related matters are deregulated with the concerned Banks and their respective Board of Directors, who decide about the loan amount and recovery policy.
“In this scenario, will the Finance Minister Nirmala Sitharaman announce stricter norms to pin the accountability on the lenders, right from the managers to the Board of Directors - and in case of NPAs - recover the lost amounts from the banks’ own executives for their lapses and poor judgement,” demanded Sarda.
Sarda and banking activists urge the new RBI Governor Sanjay Malhotra to suggest measures under the banking laws to make the top directors, officials and/or external forces who pressurize the banks responsible, liable and punishable within a reasonable time-frame.
They aver that this could help prevent defaulters like Nirav Modi, Mehul Choksi, Lalit Modi, Vijay Mallya plus many more who brazenly dupe banks of public money and sneak out of India with political patronage to enjoy their ill-gotten wealth, in future.
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