Bank of Baroda (BoB), the second largest public sector bank (PSB), has written off bad loans worth Rs44,481.24 crore of big defaulters with an outstanding of Rs100 crore and more over the past 10 years. During the same period, BoB managed to recover just 25% of the written-off debt, as per information obtained by right to information (RTI) activist Vivek Velankar.
However, the lender refused to provide information about bad loans written off and the recovery of borrowers who owe Rs1 crore and below to BoB between FY12-13 and FY21-22. In a reply, Bipin Chandra Khanna, deputy general manager and public information officer (PIO) at BoB, says, "The information sought is not readily available in material form and hence cannot be provided."
Mr Velankar, who is also president of Sajag Nagrik Manch of Pune, says, "When a common borrower defaults, the same banks publish his name and all details through advertisement in newspapers. Why do they want to keep the names of big defaulters hidden? Why the 'confidentiality' clause does not come while publicising names of common borrowers."
In the reply, the PIO of BoB says, "...during the corresponding period, (the) Bank has not specifically written off any amount for any borrower, except in the case where compromise settlements are sanctioned as per (the) Bank's policy and part amount is written off as hair cut."
The PIO also clarified, "The figure provided by us of technically written off accounts, which are not being written off actually and the account will remain in the books of the branch. However, in these accounts, borrowers are liable to pay the full dues, and banks are having full recourse to recover the dues. All the recovery measures are being taken as in case of NPA accounts."
Like other PSBs, Bank of Baroda also refused to share names of big borrowers who have defaulted on loans over Rs100 crore. The PIO says, "The list of loan takers is related to third party personal information, disclosure of which is exempted as per the provisions of Section 8(1)(j) of RTI Act. Hence cannot be disclosed."
Recent information procured by Mr Velankar under RTI shows that, from FY12-13 to FY21-22, Bank of Baroda technically wrote off 144 accounts with bad debts of Rs100 crore and more. These add up to Rs44,481.24 crore over eight years, while recovery is about 25% or Rs11,124.09 crore in that period.
During FY12-13 up to FY18-19, BoB wrote off big defaulters' Rs11,016.20 crore from 51 accounts. However, on 1 April 2019, Vijaya Bank and Dena Bank, were merged with BoB, so the figures from FY19-20 include bad loans written off of these two lenders.
During the past three years, the amalgamated BoB has written off big defaulters' (Rs100 crore and more) bad debt from 93 accounts, worth Rs33,465.04 crore, the information provided under RTI Act shows.
Earlier in March this year, Dr Bhagwat Karad, minister of state for finance, told the Rajya Sabha that public sector banks (PSBs) had effected a total recovery of Rs3,12,987 crore in non-performing asset (NPA) accounts and written-off loans since FY18-19 to FY20-21.
In April 2022, Dr Karad told the upper house that all scheduled commercial banks (SCB) operating in India have cumulatively written off loans of Rs2,02,781 crore in FY20-21. As expected, PSBs lead the pack and have written off bad loans worth Rs1,31,894 during FY20-21.
"Banks evaluate or consider the impact of write-offs as part of their regular exercise to clean up their balance sheet, avail of tax benefits, and optimise capital according to RBI guidelines and policy approved by bank boards. The borrowers of written-off loans continue to be liable for repayment, and the process of recovery of dues from the borrower in written-off loan accounts continues," Dr Karad says. (Read: Rs2.02 Lakh Crore Bad Loans Written Off by Scheduled Commercial Banks in FY21: Govt)