The Finance Ministry clarified before the Lok Sabha that the Public Sector Banks (PSB) have not recovered even ₹1 vs ₹5 written off in the last nine years. The Minister did not name individual borrowers whose accounts have been written off citing the RBI Act. Against an aggregate loan write-off of Rs 10.42 lakh crore, PSBs have recovered just Rs 1.61 lakh crore from written-off loans, since financial year 2014-15. The recovered amount is 15.45 per cent of the total written-off amount during the period.
According to RBI guidelines and the policy approved by bank boards, NPAs, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank concerned by way of a write-off. Recovery from written-off accounts can be initiated through various mechanisms, by filing suits in the Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, through negotiated settlement/ compromise, and sale of non-performing assets or even by filing a civil suit.