RTI: Pandemic also hurt banks, and NPAs’ writeoffs zooming

By Quaid NajmPune, December 12, 2018 : .

The Covid-19 epidemic that has been ongoing since March 2020 has caused severe damage to the community and the financial industry.

According to an RTI response, NPAs have seen a significant increase in write-offs.According to Prafful Sarda, Pune businessman, the malady affected nearly all public and private sector banks as well as NBFCs, urban cooperative banks, and foreign NBFCs, almost equally.

These calculations are for 15 months, from April 1, 2020 through June 30, 2021.They reveal the grim reality of the bank industrys NPA write-offs.

The PSBs wrote down a huge amount of NPAs during the pandemic.Private sector actors had to write off NPAs in excess of Rs 80,883 crore.

Foreign banks, NBFCs, and Scheduled Commercial Banks had NPAs write-offs of approximately Rs 3,826 crore.Rs 1,216 crore and R 2,859 crore were respectively.It is a shocking sum of Rs 2.45,465 crore NPAs that were written off during the initial 15 months of this pandemic.This number continues to rise.

The State Bank Of India and Bank Of Baroda were among the top-performing banks during the period of the pandemic.Axis Bank (ICICI Bank), HDFC Bank, HDFC Bank, and Yes Bank are some of the largest private sector banks to have made huge NPA writeoffs during the pandemic.

Among the approximately five dozen foreign banks that are included in this list, at least two stand out for NPAs write off -- Standard Chartered Bank & CitiBank.

The major NBFCs that figure in the NPAs write-off list are: Jana Small Finance Bank Ltd, Ujjivan Small Finance Bank Ltd, and Equitas, besides large amounts written-off by Scheduled Commercial Banks during the pandemic.The amounts of NPAs written-off from April 1, 2015 - March 31, 2020 were: Rs 875,770 crore consisting of PSBs Rs 675,593 crore, Private Banks Rs 172,161 crore, Foreign Banks Rs 20,056 crore, NBFCs Rs 1,526 Crore and Urban Co-operative Banks Rs 6,434 crore.In comparison, from April 1, 2015 - March 31, 2021, the loan write-offs to reduce the NPAs were: Rs 11,19,482 crore, comprising PSBs Rs 832,274 crore, Private Banks Rs 253,044 crore Foreign Banks Rs 23,882 crore, NBFCs Rs 2,742 crore and Urban Co-operative Banks Rs 7,540 crore.Accordingly, Sarda said that from April 1, 2015 till June 30, 2021, the figure of NPAs write-offs during the NDA rule went up by more than 500 percent compared with the write-offs allowed during the 10 years of the previous UPA regime, as per the governments own RTI replies earlier.

On this, Sarda said that despite claims by the Bharatiya Janata Party-led NDA government, the economic situation is not all that rosy considering the RTI revelations of loan write-offs to reduce NPAs during the 15 months of the pandemic."The Government had announced a huge pandemic relief package worth Rs 20 lakh crore to boost the economy.

By its own admissions vide RTIs in the past, the Centre has admitted that it has barely given out around Rs 3 lakh crore from those packages.Is that the reason for the banks now suffering massive NPAs? Whos responsible for this mess," demanded Sarda.(Quaid Najmi can be contacted at q.najmi@ians.in)qn/bg/ksk/