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Press Trust of India Public sector banks made an upfront provision of ₹3.79 lakh crore between March 2014 and June 2017 towards stressed loans, which was nearly twice the provisions made in the preceding 10 years, the government said on Friday.
In a written reply to the Lok Sabha, Minister of State for Finance Shiv Pratap Shukla said that due to the Asset Quality Review and transparent recognition of restructured loans as non-performing assets, gross NPAs of public sector banks (PSBs) increased by over ₹4.54 lakh crore between March 2015 and June 2017. “PSBs accordingly made upfront provision for expected loss on such stressed loans, of a total amount of ₹3,79,080 crore between March 2014 and June 2017, which was nearly twice the provision of ₹1,96,937 crore made in the preceding 10 years,” he said.
“As per RBI guidelines and policy approved by bank boards, non-performing loans, including... those in respect of which full provisioning has been made on completion of four years are removed from the balance sheets of the bank concerned by way of write-off,” he added. “Thus, the amount written off during the financial year 2017-18 is substantially on account of such stressed accounts of earlier years, which have been fully provisioned following the Asset Quality Review,” the minister said.
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