PSU banks have written off 52k crore worth bad loans during last fiscal

Bad loan menace has stung PSU banks quite hard as they are finding no ways to overcome the corpse of bad loans from their balance-sheets.  In fact as per data released by RBI, in FY14 alone PSU Banks have written off a whooping amount of Rs 52542 crore from their balance-sheets, highest in recent times while since FY12 banks have written off a total of staggering Rs 1.14 lakh crore of bad loans to clear the balance-sheets. Interestingly despite this write off, still the demon of bad loans is far from being dead as gross NPAs of PSBs have jacked up to over 3 lakh crore in September 2015 as against Rs 2.67 lakh crore in March 2015.

The data that RBI has released clearly shows that the 27 banks have written off their bad loans during last three years in which Rs 27231 crore was written off during FY13 while Rs 34409 crore and Rs 52542 crore were written off during the succeeding years, totaling Rs 1.14 lakh crore. Of the 27 banks SBI topped the list in terms of write offs with Rs. 21313 crore bad loans followed by Punjab National Bank   Rs 6,587 crore and Indian Overseas Bank   Rs 3,131 crore. Besides, Allahabad Bank 's write-off figure stood at Rs 2,109 crore, Central Bank of India’s  Rs 1,995 crore, IDBI Bank  at Rs 1609 crore, Bank of Baroda at  Rs 1,564 crore, Syndicate Bank at  Rs 1,527 crore, Canara Bank at  Rs 1,472 crore and UCO Bank  at Rs 1,401 crore.

Importantly RBI Governor Raghuram Rajan has already flagged the crippled balance-sheets of the banks and instructed them to anyhow clean them till FY17. He was of the view that though banks have enough funds and there is no problem with their capital adequacy but due to high amount of bad loans and write offs, their profitability would surely get hampered. On the finance part already government has initiated the process of recapitalizing banks via Indradhanush program, where Rs 70000 crore will be infused into banks and they will also raise over Rs 1 lakh crore from the markets in line with Basel III norms.