PSBs recover Rs 6.42 trn NPAs, written off loans since from FY15 to FY22

The public sector banks (PSBs) since FY2014-15 have recovered Rs 6.42 trillion of non-performing loans and written-off loans and have filed suits against 98.5 per cent of wilful defaulters, The Economic Times (ET) reported on Monday quoting government data. 

From FY16 to FY21, the central government has infused Rs 3.36 trillion of capital in PSBs, while banks have raised an additional Rs 2.99 trillion from the markets, the data shared by ET stated. 

Meanwhile, the PSBs provision coverage ratio, a measure that indicates the amount set aside by lenders to cover bad loans, improved to 86.9 per cent by the end of FY22, from 46 per cent at the end of March 2015, the data showed. 

Since FY15, PSBs have recovered Rs 5.17 trillion in non-performing assets (NPAs) and Rs 1.24 trillion in written-off accounts. 

The gross NPA ratio of the state-owned banks fell to 7.4 per cent by the end of FY22, as compared to 14.6 per cent in FY18. Meanwhile, the net NPA ratio of PSBs declined to 2 per cent from 8 per cent, and stressed assets came down to 8.7 per cent from 15.3 per cent over the same period, the ET report stated.

"Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available," a senior government official said, quoted ET.

"The improved detection and reporting accompanied with the comprehensive steps taken to check frauds have resulted in a decline in the occurrence of such frauds," the official told ET.

The occurrence of fraud proportional to the gross advances of the state-owned banks dropped to 0.05 per cent per cent during FY22 from a peak of 1.32 per cent during the financial year 2013-14. 

Out of 12,265 designated wilful defaulters, PSBs have filed suits against  12,076 (98.5 per cent), FIRs against 40.2 per cent and SARFAESI action has been initiated against 75.5 per cent, ET reported.