Banks write off NPAs over Rs 10 lakh cr in last five financial years: Sitharaman

New Delhi: Banks have written off bad loans worth Rs 10,09,511 crore during the last five financial years, the finance minister Nirmala Sitharaman informed Parliament on Tuesday. "The non-performing assets (NPAs) including those in respect of which full provisioning has been made on completion of four years, are removed from the balance sheet of the bank concerned by way of write-off," she said in a reply to Rajya Sabha.

'SCBs wrote off an amount of Rs 10,09,511 crore during the last five financial years'

"Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefit and optimise capital, in accordance with RBI guidelines and policy approved by their boards. As per inputs received from RBI, Scheduled Commercial Banks (SCBs) wrote off an amount of Rs 10,09,511 crore during the last five financial years," Sitharaman said.

"As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in written-off loan accounts continues, write-off does not benefit the borrower," she added.

"SCBs have recovered an aggregate amount of Rs 6,59,596 crore, including recovery of Rs 1,32,036 crore from written-off loan accounts during the last five financial years," she said.

Govt, RBI measures help banks recover bad loans worth over Rs 8.6 lakh crore

'Officials are responsible for the lapses of non-compliance with the laid down systems'

"In cases where it is prima facie found that officials are responsible for the lapses of non-compliance with the laid down systems and procedures or misconduct or non-adherence to the due-diligence norms, action is initiated against the erring officials under the board-approved staff accountability policy," Sitharaman said.

As per inputs received from public sector banks, she said, "staff accountability in respect of NPA cases has been fixed against 3,312 bank officials (of AGM and above rank) during the last five financial years, and suitable punitive actions have been taken commensurate to their lapses."

Only a few banks are using blockchain technology: IBA informs FM

Replying to another question, Sitharaman said that Indian Banks Association (IBA) has informed that at present, only a few banks are using blockchain technology at a small scale.

"As such, the issue pertaining to interoperability of such a platform between banks is not present," she said.

"Further, Indian Banks' Blockchain Infrastructure Company (IBBIC) Private Limited that was incorporated with an objective of providing a platform for exploring, building, and implementing Distributed Ledger Technology (DLT) solutions for the Indian financial services sector, is currently working on scoping the implementation of domestic Letter of Credit (LC) issuance as its first use case through the platform," she added.

The consortium consists of 18 banks comprising leading public and private sector banks of India.

RBI provides guidance for development of blockchain technology

Reserve Bank of India (RBI) has been providing guidance for development of blockchain-based application through its mechanism for testing of innovative technologies, products and services, known as regulatory sandbox.

Blockchain technology has been listed as one of the innovative technologies in this regard, where innovators can apply to test their products through this mechanism, she said.

There is no proposal to set up guidelines or prescribe a model common blockchain technology platform for the banks, she said.

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