GOVERNMENT OF INDIA
Ministry of Finance

RAJYA SABHA
UNSTARRED QUESTION NO 1184
TO BE ANSWERED ON 08.03.2016
Decline in recovery rate in PSBs


1184. Shri Rajeev Chandrasekhar 

Will the Minister of FINANCE be pleased to state:-

a) whether the Government has constituted any special arrangements to recover the loan amounts from the NPA accounts and willful defaulters, if so, the details thereof;

b) the composition , role and responsibility of Assets Reconstruction Company (ARC) registered with Reserve Bank of India;

c) the total value of NPA accounts/bad loans bought by ARCs in the last five years and the total value of security receipts received by Nationalized Banks; and

d) the Foreign Investment in ARCs and the modalities for recovery procedures adopted by the ARCs with Foreign Investments?

Answer
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(a) to (b): The percentage of amount recovered against write-offs done by Public Sector Banks (PSBs) has declined from 24.50% during FY13 to 20.59% during FY14 and further to 15.23% during FY15.
The data of amount recovered against total write-offs for top five PSBs (by gross advances) during the last three financial years is enclosed as annexure-I.

(c): In the recent years the rate of recovery (out of the written-off amount) has declined due to exponential growth of the Non-Performing Assets (NPAs).

The reasons for increase in NPAs include slowdown in recovery in the global economy and continuing uncertainty in the global markets leading to lower exports of various products like textiles, engineering goods, leather and gems etc., factors like volatility in prices of raw material and the shortage in availability of power to some sectors.
The government has taken specific measures to address issues in sectors such as Infrastructure (Power, Roads etc.), Steel and Textiles, where incidence of NPAs is high. The government has also approved establishment of six (6) new Debt Recovery Tribunals (DRTs), to speed up the recovery of bad loans of the banking sector, in addition to existing thirty three. Reserve Bank of India (RBI) has also undertaken steps which include (i) Formation of Joint Lenders’ Forum (JLF) for revitalizing stressed assets in the system, (ii) Flexible Structuring for long term project loans to Infrastructure and Core industries, and (iii) Strategic Debt Restructuring (SDR) scheme.

(d) The details of the number of individual or business entities whose bad debts to the tune of Rs. 100 crore or more have been written off by the PSBs in the last three years, year wise, has been enclosed in annexure ll.11