Banks have written off bad loans worth Rs 10.09 lakh crore in the last five financial years, 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 a write-off, she said in a reply to the Rajya Sabha.
“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 policies approved by their boards. Scheduled Commercial Banks (SCBs) wrote off an amount of Rs 10,09,511 crore during the last five financial years,” she 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, a write-off does not benefit the borrower, she said.