Scheduled commercial banks managed to recover more from non-performing assets (NPAs) in 2017-18 against 2016-17 due to vigorous efforts for speedy recovery via the Insolvency and Bankruptcy Code (IBC) and the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act routes.

Overall ratio

According to the Reserve Bank of India’s ‘Report on Trend and Progress of Banking in India 2017-18’, which was released on Friday, the overall ratio of amount recovered to the amount involved (exposure of banks to NPA accounts) improved drastically to 41.3 per cent against 13.8 per cent in the previous year. As per provisional data for 2017-18, banks recovered ₹5.28 lakh crore (₹38,500 crore in the previous year), while the amount involved was ₹12,78,600 crore (₹2,78,300 crore).

In the reporting period, the maximum amount recovered was ₹4,92,500 crore (realisation by financial creditors from 21 companies, for which resolution plans were approved) via the IBC route, while the amount involved was ₹9,92,900 crore. The ratio of amount recovered to the amount involved in this case was robust at 49.6 per cent.

In the previous year, when the IBC was operationalised, 37 cases were admitted by the National Company Law Tribunals. But data on the amount recovered and amount involved has not been disclosed by the RBI. Under the SARFAESI route, banks recovered ₹26,500 crore (₹25,900 crore), while the amount involved stood at ₹1,06,700 crore (₹1,41,400 crore). The ratio of amount recovered to amount involved in this case improved to 24.8 per cent, against 18.3 per cent in the previous year. Under the Debts Recovery Tribunal route, banks’ recovery declined to ₹7,200 crore (₹10,300 crore), while the amount involved stood at ₹1,33,300 crore (₹1,00,800 crore).

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