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 NPA

Loan Write off:
When the Bank declares that it may not be able to recover the loan, it gets categorised as Write Off

Loan----(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:


  1. https://www.moneylife.in/article/bank-loans-write-off-nda-scores-three-times-over-upa-says-rti/62429.html ↩︎ ↩︎ ↩︎ ↩︎ ↩︎ ↩︎

  2. https://thewire.in/business/modi-government-npas-loans-write-off-12-lakh-crore ↩︎ ↩︎

  3. https://indianexpress.com/article/business/wilful-defaulters-fraudsters-can-go-for-compromise-settlement-rbi-8657675/ ↩︎ ↩︎

  4. 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/ ↩︎

  5. https://indianexpress.com/article/business/bank-unions-slam-rbis-decision-on-allowing-compromise-settlement-for-wilful-defaulters-8661419/ ↩︎

  6. https://twitter.com/PKakkar_/status/1669200116857864192 ↩︎

  7. 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 ↩︎

  8. https://www.rbi.org.in/Scripts/AnnualReportPublications.aspx?year=2023, page 154 ↩︎

  9. https://timesofindia.indiatimes.com/business/india-business/modis-psu-bank-spends-beat-45-years-investments/articleshow/70252242.cms ↩︎

  10. https://www.financialexpress.com/india-news/mehul-choksi-a-crook-to-be-extradited-to-india-antigua-pm/1717907/ ↩︎

  11. https://www.youtube.com/watch?v=wus9VnWAKyo ↩︎

  12. https://www.moneylife.in/article/how-opaque-electoral-bonds-edge-out-transparent-funding-routes-for-7-political-parties/59151.html ↩︎

  13. 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 ↩︎ ↩︎

  14. https://scroll.in/latest/1004282/bjp-got-3-5-times-more-than-aggregate-income-of-parties-from-unidentified-sources-in-2019-20-adr ↩︎