Last Updated: 01 Mar 2023
Loan NPA(Non-performing asset):
NPA is a measure of 'bad loans' which may eventually be written off. When a person does not pay EMI for 90 days, the loan is classified as NPALoan Write off:
When the Bank declares that it may not be able to recover the loan, it gets categorised as Write OffLoan----(Not Paid for 90 days)--->NPA---(Bank loses Hope)--->Write Off
¶ Loan write offs in India
| Period | Write offs |
|---|---|
| 2004-2014 | ₹2.2 lakh crore[1] |
| 2014-2019 | ₹7.9 lakh crore[1:1] |
| 2019-2022 | ~₹6.6 lakh crore[1:2][2] |
i.e. ~₹40,000* per household was lost to loan default already under Modi Govt
-- On 12 June 2023, RBI allowed willful defaulters to compromise & take fresh loans from bank[3]
-- i.e. another ~₹3.46 lakh crore waiting to be written off[4]
-- i.e. another ~₹11,000 per household to be lost *
-- A willful defaulter is a borrower who refuses to repay loans despite having the capacity to pay up
-- Bank Unions representing 6 lakh employees protested in 2023 against this Modi Govt's compromised settlement with fraudulent defaulters[5][6]
Some written off loans are also recovered but recovery has been between 10% to 15%[1:3][7]
* estimate with 30 crore households and 15% recovery rate
¶ Large scale fraud in Public Banks
- Most of the loan defaults are corporate loans given by Public sector banks[1:4]
- 1.4 lakh crores lost between 2020-2023 to outright fraud in Public banks as per RBI report[8]
- Public sector banks needed ₹2.7 lakh crores recapitalisation during Modi Govt[9]
¶ Comparison of NPA with other countries
The following comparison[2:1] of NPA with other countries indicates governance issues in India
- US, UK : 1%.
- Canada, South Korea : <0.5%.
- China : 1.7%.
- India : 11.5%(2018) to 5%(2022)
(RBI in RTI Reply: The reduction in NPAs due to write-offs was Rs 13,22,309 crore in last ten years[3:1])
¶ Defaulters receive blessing of Govt inaction?
- 72 big defaulters (Mehul Choksi, Nirav Modi, etc.) absconding. Govt caught only 2[1:5]
- Despite Antigua PM showing willingness[10], Modi Govt failed to secure extradition of Mehul Choksi. There is video evidence to suggest that Modi personally knew Mehul Choksi[11]
¶ Political Donations
- Electoral bonds introduced by BJP make it impossible to know if BJP has received a donation from the big defaulters[12] or if the inaction is due to BJP incompetence
- BJP received lion's share Rs 4,215.89 crore (67.9 percent of total) donation via Electoral Bonds between financial years 2017-18 and 2019-20[13][14]
Total Donations between financial years 2017-18 and 2019-20[13:1]
REFERENCES:
https://www.moneylife.in/article/bank-loans-write-off-nda-scores-three-times-over-upa-says-rti/62429.html ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎
https://thewire.in/business/modi-government-npas-loans-write-off-12-lakh-crore ↩︎ ↩︎
https://indianexpress.com/article/business/wilful-defaulters-fraudsters-can-go-for-compromise-settlement-rbi-8657675/ ↩︎ ↩︎
https://indianexpress.com/article/business/banking-and-finance/banks-may-have-to-settle-with-some-of-the-16044-wilful-default-accounts-with-rs-346479-crore-debt-till-end-2022-8670020/ ↩︎
https://indianexpress.com/article/business/bank-unions-slam-rbis-decision-on-allowing-compromise-settlement-for-wilful-defaulters-8661419/ ↩︎
https://economictimes.indiatimes.com/industry/banking/finance/finance-ministry-wants-state-run-banks-banks-to-enhance-recovery-rate-from-written-off-accounts-to-about-40/articleshow/99908818.cms ↩︎
https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?year=2023, page 154 ↩︎
https://timesofindia.indiatimes.com/business/india-business/modis-psu-bank-spends-beat-45-years-investments/articleshow/70252242.cms ↩︎
https://www.financialexpress.com/india-news/mehul-choksi-a-crook-to-be-extradited-to-india-antigua-pm/1717907/ ↩︎
https://www.moneylife.in/article/how-opaque-electoral-bonds-edge-out-transparent-funding-routes-for-7-political-parties/59151.html ↩︎
https://www.thequint.com/news/india/only-19-parties-received-money-from-electoral-bonds-bjp-got-68-investigation-bjp-reporters-collective-supreme-court-105-parties ↩︎ ↩︎
https://scroll.in/latest/1004282/bjp-got-3-5-times-more-than-aggregate-income-of-parties-from-unidentified-sources-in-2019-20-adr ↩︎
