Banks write off Rs. 2 lakh crore loans

Pune, MAY 28: A shocking news took from the banks has occurred yesterday. The scheduled commercial banks (SCBs) wrote off Rs 2,25,180 crore cumulatively in the five-year period ended March 2016.

The information was revealed during the reply of an RTI. The request regarding the banks write off loans was filed by Times of India.

SCBs include all public sector banks, private sector banks, foreign banks, regional rural banks and co-operative banks. These banks are responsible for 95% of the formal credit given out by all banks in the country.

Experts say that this is the highest amount of loans written off by SCB. Banks and the RBI have clarified that these write-offs are just technical in nature and an exercise to clean up the balance sheets.

They have also said that banks will still have the right to recover the loans. A similar argument was put up by Finance Minister Arun Jaitley in Parliment the last session when a popular Bank SBI had written off the loans given to a fraudster Vijay Mallya.

Many people are criticizing the banks for writing off loans.Let's hope that banks will soon redefine the word written off so that people may not be confused.