It is reported that the Finance Minister informed the Parliament that banks have written off Rs.10 lakh crore only of Non-performing assets (NPAs) in the last five financial years. The figure is based on data provided by the Reserve Bank of India and Schedule Commercial Banks (SCBs).
According to the Minister, “Banks write off NPAs as part of their regular exercise to clean up their balance sheet, avail tax benefits and optimise capital, in accordance with the RBI guidelines and policy approved by their boards.”
Although accountability of the 3,312 staff in the ranks of assistant general managers and above has been fixed and suitable punitive actions have been taken but are they to be solely blamed for the fiasco? Perhaps they were arm twisted by some authorities or by the applicants to provide the loan, while not ruling out misdemeanor and vested interest by a handful of the staff.
Should we be shocked at the whooping amount of Rs 2 lakh crore that was ‘cleaned’ every year from the banks’ balance sheet in the last five years or say to ourselves, “It’s no skin off my nose?” The government should give a spilt up of the NPAs, amounts and parties/persons who defaulted on the loan payments. With all the law enforcement agencies at its disposal, the government should track if the NPAs are genuine, or the loan monies were siphoned off from the country, used to buy movable and immovable assets, invested in the parallel economy or used to fund illegal activities.
