MUMBAI, Dec 19 (Reuters) – Indian banks have written off more than 10 trillion rupees ($121.05 billion) in loans over the past five fiscal years in an effort to clean up their balance sheets, according to the federal government.
State Bank of India ( SBI.NS ), the country’s largest lender, topped the list with the largest write-down at 2.04 trillion rupees, the finance ministry said in a written response to a question in the lower house of parliament. Monday.
Punjab National Bank ( PNBK.NS ), another state-owned lender, came second with write-downs of 923.39 billion rupees. Two other public sector banks, Oriental Bank of Commerce and United Bank of India, merged into PNB in April 2020.
Banks are writing off loans in an attempt to clean up their balance sheets after setting aside adequate reserves. Once an account is written off, it does not appear as an asset on the bank’s balance sheet, but efforts to recover the debt through bankruptcy proceedings or the sale of bad loans continue.
State-owned banks have recovered loans worth 4.80 trillion rupees in the last five financial years, including 1.03 trillion rupees from written-off assets, according to Central Bank data, the finance ministry said in its reply.
Overall, the health of Indian banks has improved with the gross non-performing asset ratio of scheduled commercial banks falling to 5.9% in March 2022, the central bank said in its biennial release earlier this year. The report also highlighted that the ratio could further decrease to 5.3% by the end of this March.
($1 = 82.6070 Indian Rupees)
Reported by Nupur Anand; Editing by Dhanya Ann Thoppil
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