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Wednesday, January 19, 2022

Canara Bank loaned off Rs 47,310 crore in 8 years, recovery was just 19%

In eight years, the recovery of bad loans of only Rs 8901 crore is removed from the balance sheet of the bank under the write-off.

Public Sector Banks (PSBs) Canara Bank has written off a bad loan of Rs 47,310 crore in eight years during the financial years 2012-13 to 2019-20. While the recovery during this period has been 19 per cent i.e. Rs 8901 crore. This information has come from the data found under the Right to Information (RTI) Act.

Refusal to give information about big defaulters

Under the RTI, information on defaulters worth more than Rs 100 crore was also sought from the bank. But on the lines of other PSBs, Canara Bank has also refused to give details of major defaulters. The bank has said in response to RTI that it is a matter related to private information and it has nothing to do with public interest. In such a situation, it cannot be answered under section 8 (1) (j) of RTI Act.

What is write off?

When the loan is not recovered, the bank declares it as Non-Performing Asset (NPA). Higher NPAs disturb the bank’s balance sheet. To correct this mess, banks write off unsecured loans. Right of loan is removed from the balance sheet. Right off is also called a discount account in common language.

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SBI write off 1.23 lakh crore loan from 2012 to 2020

According to another RTI, the country’s largest bank State Bank of India (SBI) has written off a loan of one lakh 23 thousand 432 crore during 2012 to 2020. Out of this, only Rs 8,969 crore has been recovered till 31 March 2020. That is 7.26 percent. The remaining amount has not been recovered till date. Major borrowers of SBI include companies like Videocon, Alok Industries and Bhushan Steel.

Right of loan is generally above 100 crores

Banks write off debts of big borrowers. This write-off is done for loans of more than Rs 100 crore. In the recent past, there are hundreds of borrowers in the country who have taken loans of more than 100 crores from banks. Later, when the recovery was not made, the banks were written off.

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