According to RTI responses received to the request filed by Pune-based activist Vivek Velankar, 6.32 lakh crores of bad loans were written off by 12 nationalised banks in the last 8 years from 2012 of which only 17 per cent or 1.08 lakh crores have been recovered. 2.78 lakh crores of these written-off loans belong to big defaulters who received loans of over 100 crores.
The 12 banks are State Bank of India (SBI), Bank of Baroda (BoB), Bank of Maharashtra (BoM), Union Bank of India (UBI), IDBI Bank, Punjab National Bank (PNB), Indian Overseas Bank (IOB), Central Bank of India, Canara Bank, UCO Bank, Indian Bank and Bank of India (BoI).
The data was compiled partly by raising questions at the annual general meeting, RTIs and annual reports. Canara Bank and BoI, however, refused to share both write-off and recovery details from big defaulters.
Responding to the request, Canara Bank said, "Information sought is the personal information of the concerned and if disclosed would invade the privacy of those concerned and its disclosure does not have any relationship with public interest or activity and is exempted under section 8(1)(j) of the RTI Act."
"All this information is part of the banks' mandatory reporting to the Reserve Bank of India (RBI), and hence they cannot deny it under any section of the RTI Act. Also, how is it that every bank is citing a different section of the RTI Act for such refusal? For example, Canara Bank denied me this information under section 8(1)(j), and Punjab National Bank (PNB) cited sections (8)(1)(d), (8)(1)(j) and 8(1)(e)," says Vivek.
This claim also disputes the judgments of the Central Information Commission, which clarifies that to qualify for exemption under 8(1)(j), several criteria such as personal information and public interest must be fulfilled.
Union Bank and IDBI further refused to provide data on recovery from big defaulters. SBI and IOB are the only two who provided names of the big defaulters. The remaining denied claiming them to be personal information.
From the available information of recovery from big defaulters, Indian Overseas Bank has the least recovery percentage with just 0.5 per cent recovery followed by Indian Bank who recovered 1 per cent. The highest recorded recovery is by Punjab National Bank who recovered 22 per cent from big defaulters.
The list of loan write-offs over 500 crores by SBI lists 56 loan owners topped by Alok Industries Ltd with 8098.05 crores, Bhushan Power and Steel Ltd with 7705 crores, and IRVCL Ltd with 4475 crores. Of these three largest loan holders, only 1703.57 crores have been recovered and solely from Alok Industries. SBI has recovered merely 7 per cent from its big defaulters in the last 8 years.
IoB wrote off 17821 crores as of March 2020, of which they recovered 102 crores or 0.5 per cent from its 66 big defaulters. The list includes Bhushan Steel & Power Ltd with 1,274.97 crores, Lanco Amarkantak Power Pvt Ltd with 875.94 crores and Frost International Ltd with 841.03 crores.
Indian Bank with 1 per cent recovery revealed it wrote-off debts of 4792 crores to big defaulters and recovered 66 crores. Disturbingly, the bank claims to have information on big loan holders, their write-offs and recovery from only 2017 and none for the period before it.
In October 2018, then Finance Minister Arun Jaitley had taken to Facebook to announce that loan write-off does not mean waiver but is a common practice in banking to reduce Non-Performing Assets (NPA) and that loan recovery shall continue. However, in the last four years, Public Sector Banks wrote off 4.95 lakh crores of loans of which only 16 per cent or 79000 crores have been recovered.