GOVERNMENT OF INDIA
Ministry of Finance

RAJYA SABHA
UNSTARRED QUESTION NO 562
TO BE ANSWERED ON 01.03.2016
Steps to reduce gross NPAs of PSBs

562. Shri Rajeev Chandrasekhar 

Will the Minister of FINANCE be pleased to state:-

(a) the details of recoveries and write-offs by Public Sector Banks (PSBs) during the last two years;

(b) what options the banks have exercised to improve the pace of recovery;

(c) the steps being taken to reduce gross NPAs of Public Sector Banks; and

(d) the implications of these write-offs per capita on tax-payees and on each citizen, respectively, with details thereof?

Answer
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE

(a): Non-Performing Assets (NPAs) reduction is done by way of recoveries, write-offs and up-gradations. Their details in respect of Public Sector Banks (PSBs) during the last two years are annexed.

(b) & (c): To improve asset quality of banks, and to prevent slippages, Reserve Bank of India (RBI) has issued instructions which stipulate that each bank is to have a Board approved loan policy, loan recovery policy, put in place an effective mechanism for information sharing for sanction of fresh loans/ad-hoc loans/renewal of loans to new or existing borrowers, have a robust mechanism for early detection of signs of distress including prompt restructuring in the case of all viable accounts, taking recourse to legal mechanisms like SARFAESI Act, 2002, DRTs and Lok Adalats.

Further, RBI as the regulator has undertaken steps which include (i) Formation of Joint Lenders’ Forum (JLF) for early recognition and 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.

Government is taking sector specific measures in identified infrastructure and core sectors where there is stress due to systemic issues. Government has 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.
(d): The data reporting system of RBI does not collate information on the implications of these write-offs per capita on tax-payees and on each citizen.