Bank of India Refuses to Share under RTI Information on Rs57,275 Crore Bad Loans Written Off and 23% Recovery in Past 8 Years
The way public sector banks (PSBs) are giving flimsy excuses for denying information under the Right to Information (RTI) Act on bad loans, loan write-off and names of big defaulters, whose defaults are Rs100 crore and more, one could safely say that the public information officers (PIOs) of these PSBs have mastered the art of evasion to a fault.  Take for example, Bank of India (BoI), which refused to share any information on loan write-offs over the past eight years by giving an excuse that it would 'disproportionately divert its resources'! Notwithstanding, Pune-based RTI activist Vivek Velankar went on to study BoI's annual reports, which yielded the information in black & white, that the lender wrote off Rs57,275 crore and recovered just 23% or Rs13,560 crore over the past eight years.
Mr Velankar says, "Not many banks are sharing information on loan write-offs and recovery. Some PIOs told me to check the annual reports to know loan write offs and recoveries. However, A Sasikumar, the central PIO of Bank of India, did not even take that much trouble. He simply denied information saying that procurement and compilation of this information would disproportionately divert the bank’s resources. In this case, I am wondering what information the bank would have sent on loan write-offs to the Reserve Bank of India (RBI) under regulatory compliance."
In line with his previous experience with other banks, Mr Velankar did study annual reports of the BoI to find out total loan write-offs and recovery made by the bank over the past eight years. 
"Between FY2012-13 to FY2019-20, Bank of India wrote off Rs57,275 crore and recovered just Rs13,560 crore or about 23%. BoI too denied me the information on the names of its big defaulters citing 'competitive position of third parties' and 'unwarranted invasion of privacy of such a third party'! My point is simple, if these are defaulters who have not repaid loans taken from the bank, then why is BoI  shielding them under fictitious reasons? Why protect competition position and privacy rights of big defaulters when this is affecting its own balance sheet and financial health?" Mr Velankar, who is also President of Sajag Nagrik Manch, says.
Declining to share information on big defaulters, the chief public information officer (CPIO) of Bank of India told Mr Velankar that "...the information sought is relating to third parties that are exempted under section 8(1)(j) of the RTI Act, the disclosure of which would harm the competitive position of the third parties as well as cause unwarranted invasion of the privacy of such third party and not larger public interest warrants disclosure of such information. Moreover, under section 13 of the Banking Companies (acquisition and transfer of undertakings) Act, bank shall not divulge information or details pertaining to its customers."
This reply from the CPIO is totally wrong on two grounds. One, when it comes to sharing information and if the information is available on record, then no other Act can overturn the RTI Act. This means, the PIO simply cannot use any Act to deny information, which is asked for under the RTI. He needs to use the provision of the RTI Act only if he has genuine reasons for not sharing the information. 
Former central information commissioner and RTI activist, Shailesh Gandhi, has been quite vocal about the misuse of Section 8(1)(j) by PIOs to deny information. Recently, while speaking at a webinar organised by Moneylife Foundation, he reiterated “Everybody will have their various interpretations. In my opinion, that is why a proviso was given only for Section 8 (1)(j), which said that ‘provided the information which cannot be denied to the Parliament or state legislature should not be denied to any person’.”
Banks are mandated to submit reports to the Reserve Bank of India (RBI) on a periodic basis. These reports include information on non-performing assets (NPAs), loan write offs and recoveries made during that period. So, if Bank of India has submitted its compliance report to the RBI, then it cannot deny the same information to an applicant under the RTI Act.
"When a common borrower defaults, the same bank publishes his name, photo, name of guarantors and all other details related with the loan through advertisements in newspapers. Then why do they want to keep the names of bigger defaulters hidden? Why don’t the 'competitive position' and 'unwarranted invasion of privacy’ clauses apply while publicising the names of the common borrowers?" Mr Velankar asks.
Except the State Bank of India (SBI), every other PSB has declined to share information like names and amounts borrowed by big borrowers which turned into non-performing assets (NPAs). Even in the case of SBI, Mr Velankar could access the list of big defaulters only because he is a shareholder and had asked the question during the annual general meeting (AGM) of the Bank. 
Technically speaking, when debts are written off, they are removed as assets from the balance sheet because the bank does not expect to recover payment. 
This practice is frowned upon by experts but is routinely done by banks as part of their tax management clean-up process. The beneficiaries are invariably some of our biggest industrialist defaulters. 
In contrast, when a bad debt is written down, some of the bad debt value remains as an asset because the bank expects to recover it. 
Such write-offs also debunk the aggressive posturing by the government and policy-makers about their so-called recovery efforts.
As reported by Moneylife, Indian Bank too wrote off Rs4,792 crore bad debt of big defaulters (loan of Rs100 crore and above) while recovering just 1% or Rs66 crore from them. (Read: Indian Bank Recovered Just 1% in 3 Years after Writing Off Bad Loans Worth Rs4,792 Crore of Big Defaulters)
UCO Bank, during FY11-12 to FY19-20, wrote off Rs25,266 crore bad debt of while recovering just 7% or Rs1,702 crore from all defaulters. (Read: UCO Bank Recovered Just 7% after Writing Off Rs25,266 Crore Bad Loans over 9 Years)
During the past eight-year period from FY12-13 to FY19-20, Canara Bank wrote off a total of Rs47,310 crore while recovering just 19% or Rs8,901 crore from defaulters. (Read: Canara Bank: Rs47,310 Crore Write Off in 8 Years; Just 19% Recovery, Latest PSB Loot)
Indian Overseas Bank too wrote off a massive Rs41,392 crore as technical write-offs in the past eight-year period from FY12-13 to FY19-20. As against these write-offs, the recovery was just 17% or Rs7,253 crore. (Read: Indian Overseas Bank, Another PSB to Write Off Rs41,392 Crore in 8 Years; Recovers Just 17%)
PNB wrote off a massive Rs44,565.59 crore as technical write-offs in a four-year period from FY16-17 to FY19-20 . As against these write-offs, the recovery was just Rs12,027.97 crore. If one were to look at large loans of Rs100 crore and above, the technical write-off in this segment alone is Rs31,966 crore, while the recovery from big defaulters is only 22% at Rs7027.94 crore. (Read: Punjab National Bank Wrote Off Rs31,966 Crore in Past 4 Years; Recovered only 22% from Big Defaulters)
Similarly, IDBI Bank, which became a private sector lender a few months ago, wrote off total bad loans worth Rs45,693 crore but could recover just 8% of it after spending more than Rs29 crore during the past seven years. (Read: IDBI Bank Wrote Off Rs45,693 Crore Bad Loans and Recovered Just 8% in 7 Years)
Union Bank of India too wrote off bad debt worth Rs26,072.81 crore between FY11-12 and FY19-20 (this information pertains only to loans of over Rs100 crore). (Read: Union Bank of India Writes Off Rs26,027 Crore as Bad Loans in 8 years; Stalls Query on Recoveries and Big Defaulters’ Names)
Bank of Maharashtra has written off bad loans of over Rs7,402 crore in the past, while recovering a paltry 4% in over eight years through recovery efforts. The lender wrote off bad debts worth Rs7,402 crore during four out of the past eight years, while recovering just Rs253.55 crore. (Read: Bank of Maharashtra Writes Off Rs7,100 Crore Bad Loans; Recovers Just 4% in 8 Years)
From 2012 to 2020, BoB had technically written off 97 accounts with bad debts of Rs100 crore and more. These add up to Rs21,476.89 crore over eight years, while recovery in that same period is just 4.91% or Rs1,056.53 crore. (Read: Bank of Baroda Follows SBI, Writes Off Rs21,474 Crore in Bad Loans; Recovers only Rs1,057 Crore in Past 8 Years)
Similarly, from FY12-13 to FY19-20, SBI, the country's largest lender, wrote off bad loans worth Rs1.23 lakh crore of bad debt but recovered a paltry Rs8,969 crore. (Read: SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Paltry Rs8,969 Crore in 8 Years!)
2 years ago
Sickening, to say the least. There is no dearth of reports in the media of of banks resorting to revenue recovery and making poor borrowers homeless over night.
2 years ago
Interesting. MoneyLife doing a Great Job. In such cases Supreme Court Can't Help us ????
2 years ago
All the details of loan write-offs of Rs.100cr per client that sat on the Banks' provisions for more than two years should be kept in the public domain. This should be brought in as a mandated regulatory imperative.
2 years ago

1. To loot the Indian wealth in Trillions & shift it across the borders was a way of life during Congress regime. Congress leadership, allegedly, looted INR.17 quadrillion[1 quadrillion=1000 trillion; 1 trillion=1 lac crore], which is 45 times more than Modiji's humble plan of mobilizing US$.5 trillion by selling India's Sovereign Bonds. There is a nexus between members of CVC, IBA & CORNERED & BRIBED-UFBU AFFILIATES LED BY CHV , PSB boards/CEOs/CMDs + Duds of DOFS/UFM, ruling politicians & fugitives, etc. Unless & until the nexus is broken & culprits are booked & punished- though opening a Pandora's box- no future for India.
3. When POs mobilized huge sums of deposits and such sums were utilized by GOI through annual budgets, why can't the deposit moneys [excess liquidity after genuine advances/loans] be mobilized by PSBs & be utilized by GOI routed through annual budgets? BJP led NDA has sufficient majority in Parliament to realize the Karma Yogi PM's dreams by amending Indian Constitution suitably.
4. With a single stroke of his pen the PM can do so, in consultation with the accidental PM, DR.Manmohan Singh, A TRUE PATRIOT TO THE CORE, X RBI GUV. Once the PSB employees'/retirees' issues are brought under the purview PAY COMMISSION, the entire PSB employees/retirees are benefitted.
5. RBI must be more equipped to regulate functioning of entire banking industry. Infrastructure & manpower is aplenty in India; which require further augmentation.

2 years ago
2 years ago
That's really a ground breaking research though I know that in India Debt is getting high & recoveries are low and even our Indian Government are also trying to hide it by giving boost like not considering NPA to stressed MSME. Then, how can as a shareholder or any individual trust the process of banking. It is clearly seen that they are violating & misusing the process of accounting standards.
If every time they keep on doing write off then every one will start doing the same thing even doing it from last 8-9 years. That's illegal.
Even, any NPA recoveries should come to auction as per SARFESI and when I looked at the list of auctions of all these PSB they are less assets. They how come they are distributing loans above ₹100Cr and above..
What kind of verification they are doing while sanctioning loans to these firms??
If there is some set of additional measures by RBI on sanctioning loan beyond ₹100cr. Then it would not only makes the banking system stringent but also, gives equality to individuals who takes PL, HL, and other loans.

Earlier their was a fraud in money market instruments with respect to data entry & balancing of Gsec. But today it's with Bad loans & write offs...
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