PSU banks’ write-off of bad loans at Rs1,14,000 cr in 2013-15: RBI

Twenty-nine state-owned banks have written off a total of Rs1,14,000 crore of bad debts between financial years 2013 and 2015, much more than they had done in the preceding nine years even as loans written off by these banks between 2004 and 2015 amounted to more than Rs2,11,000 crore.

At the same time, the government is planning to inject nearly double that amount into PSU banks to shore up their finances.

The pace of growth of bad loans of public-sector banks rose from 4 per cent between 2004 and 2012 to nearly 60 per cent between the financial years 2013 and 2015. At the same time, bad loans written off in the financial year ending March 2015 made up for 85 per cent of all bad loans since 2013.

And almost all public sector banks, with the exception of State Bank of Saurashtra and State Bank of Indore, had reported bad loans in the past five years, RBI said in response to an RTI application filed by The Indian Express.

Consolidated bad debts of the banking sector more than tripled from Rs15,551 crore in the financial year ending March 2012, to Rs52,542 crore by the end of March 2015, RBI stated in its RTI response.

And now, with bad loans with state-run banks peaking, the government has been trying to shore up public sector banks through equity capital and other measures.

RBI, however, did not provide details of major defaulters, whether individual or corporate, who have amassed debts to the tune of Rs100 crore ore more, saying it does not have such information.

Banks generally report bad loans on a consolidated basis and such information can be obtained only through forensic audit of such bad loans.

Among PSU banks, top lender State Bank of India also topped the bad loans list with the highest amount of irrecoverably bad loans. In fact, SBI's bad loans shot up by 380 per cent from Rs5,594 crore in 2013 to Rs21,313 crore in 2015.

SBI's bad debts also made up 40 per cent of the total amount written off by all other banks in 2015 and were more than what 20 other banks wrote off. In 2014 too, the bank's bad debts added up to 38 per cent of the total bad loans of all banks.

The country's second-largest public sector bank, Punjab National Bank, also saw its bad loans grow by 95 per cent between 2013 and 2014 and by 238 per cent between 2014 and 2015 - from Rs1,947 crore in 2014 to Rs6,587 crore in 2015.

With stressed assets, including NPAs and restructured loans, of public sector banks rising to over Rs7,00,000 crore, Reserve Bank governor Raghuram Rajan has repeatedly been airing concern over the health of public-sector banks.

RBI has also issued fresh guidelines on asset classification and has asked banks to ensure adequate provisioning to ''strengthen their balance sheets'', besides working out schemes of merger.