SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Paltry Rs8,969 Crore in 8 Years!
Economy & Nation Brand Connect
While the banking regulator and the Union government have been busy clarifying that bad loans written off does not mean a waiver, documents procured by Vivek Velankar from State Bank of India (SBI) reveal minuscule recovery of these bad debts. Information received by Mr Velankar shows that as against a write off of Rs1,23,432 crore, SBI has recovered just over 7% or Rs8,969 crore over the past eight financial years.
Mr Velankar, president of Pune-based Sajag Nagrik Manch, says, "I tried obtaining this information under Right to Information (RTI) Act, but SBI denied it claiming that collating this information would be a waste of its resources. Being a shareholder of SBI, I then asked for this information as question for the annual general meeting (AGM). I did not get a chance to ask my question during the AGM, but the bank shared this information, which is quite shocking. This also exposes how the bank writes off loans of 100s of crores of rupees of large defaulters while denying waiver of simple interest on loans for common customers."
The Bank’s reply to Mr Velankar shows that during the eight years from FY12-13 to FY19-20, SBI has 'technically/prudentially written off’ a massive sum of Rs1.23 lakh crore from its books, but manged to recover only 7% or Rs8,969 crore in this period. This makes a mockery of the aggressive claims by a string of high profile government spokesperson and economic advisors that a ‘technical’ write-off does not stop the recovery process. The fact is that once a loan turns bad in India, it is almost impossible to recover anything because it has already been ever-greened for several years, said a former bank chairman to Moneylife.
(Source: SBI)
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. However, as SBI has shown, most of the times, there is no recovery or negligible recovery for the amounts written off. 
As per the data provided by SBI to Mr Velankar, Bhushan Power & Steel Ltd, IRVCL Ltd and Videocon Industries Ltd are its biggest defaulters, and had not re-paid a single penny. Alok Industries Ltd is the biggest borrower in this list with a written off loan of Rs8,098.05 but has repaid Rs1,703.57 crore to SBI. 
Here is the list of loan portfolios worth Rs500 crore and above that were written off by SBI.
Earlier in April, the Reserve Bank of India (RBI) had said that Indian banks have technically written off a staggering amount of Rs68,607 crore due from 50 top wilful defaulters, including absconding diamantaire Mehul Choksi. RBI had revealed this information in reply to an RTI filed by Saket Gokhale.
RBI said that this amount (Rs68,607 crore) comprising outstanding and the amounts technically or prudentially written off till 30 September 2019. 
Topping that list of top-50 defaulters to Indian banks, was Mr Choksi's scam-hit company, Gitanjali Gems Ltd, which owed Rs5,492 crore, besides other group companies, Gili India Ltd and Nakshatra Brands Ltd, which had taken loans of Rs1,447 crore and Rs1,109 crore, respectively.
Mr Choksi is currently a citizen of Antigua & Barbados Isles, while his nephew and another absconder diamond trader Nirav Modi is in London.
The second in the list is REI Agro Ltd, with an amount of Rs4,314 crore, and its directors Sandip Jhujhunwala and Sanjay Jhunjhunwala who are already under the scanner of the Enforcement Directorate (ED) since over a year.
The next on the list in the Rs4,000-crore bracket is absconding diamantaire Jatin Mehta's Winsome Diamonds & Jewellery owing Rs4,076 crore and which is being probed by the Central Bureau of Investigation for various bank frands.
In the Rs2,000-crore category, there is the Kanpur-based writing instruments giant, Rotomac Global Pvt Ltd, part of the famed Kothari group, which owed Rs2,850 crore.
3 years ago
Shri Mahalaxmi Coproration figure is wrong.It is less than 300 crores
3 years ago
1.On SBI recovery rate , only redeeming feature is that last 2 years. recovery rate is around 10 %. 2 .It is a fact that banks efforlessly write off large lians, but would not waive even interest for genuine small borrowers. 3.List of defaulters include Reliance communications.I suppose part of Ambani group !
3 years ago
Sir, it does not mean amount is 'written off' and borrower need not pay ! As per the Prudential Norms, Provision is made for these amount out of the profit of the Bank. These cases are either under court, or under recovery process. If the provision is not made as per 'norms', Bank is simply showing higher NPA on the asset side and reserve on liability side. Higher percentage of NPA gives wrong picture of the Bank. Hence, it can not be construed as 'Written off', or borrowers need not pay !Eg. In case of Nirav Modi, Vijay Mallaya's cases, banker can not simply show NPA till recovery will make prudential write off, as recovery takes time. It does not mean, they are let off. New lawas like : Fugative Offenders Act... etc.. take time to adjust the amount even if the amount is recovered. Which may please be noted.
Replied to bala.shanbhag comment 3 years ago
The people who are responsible for ever-greening got their promotion.They must be named and shamed
3 years ago
ahhahaah SBI Sickening Bank of India
3 years ago
I wonder why the properties/assets of defaulters are not being attached. Include properties of the concerned bank officials too for recovery. What about the guarantees or mortgages provided for obtaining such huge loans? And how these entities are still running their businesses?
Replied to mohd_aslam_ansari comment 3 years ago
They have partners and patrons at high places
3 years ago
The Willful Loan Defaulters such as Mallya, Nirav Modi, Mehul Choksi and others deserve to be stripped at Public Places and flogged all over their bodies with Red Hot Iron Rods. They should not be extended Public Health Facilities, supply of electricity and water to their premises should be discontinued by the Government . Ramchandra Karve
3 years ago
I understand nobody can touch cheats Nexus between criminals and bank officials has to be broken Crime can be committed only with the help of bank officers, they must be punished first
There should be at least 100 Sucheta Dalalas to wake up the authorities all the best
3 years ago
Cheating is in our blood. It has become part of our culture. PSU officials are hand in glove with scamsters. Give a loan of few hundred crores to a scamster, take a cut of few crores and you are set for life. Scamster needs courage to grease a few palms, borrow and disappear. If he is dragged to court then the same process will be followed.
Replied to umeshs62 comment 3 years ago
Court case will go on for 10 years and many officials will be transferred or will retire on this time.Only few unlucky scamsters like L P yadav go to jail.That too government does not recover the scam money.
3 years ago
If it was not owned by GOI and bankrolled by tax payers SBI long ago would have become SICK Bank of India
3 years ago
SBI's market carp is 1.67 lakh crore. So this writeoff is about 75% of its market capitalization. Any other company would have gone bankrupt long back. But we still plod along with SBI and PSU banks instead of putting the bankers and defaulters in jail.

Let's remember that for every Singal, Jivrajka, Dhoot, Choksi, Modi, Jhunjunwala, Mehta, there is at least one politician and 5 bankers guilty.
3 years ago
Surprising to see Ruchi Soya's Rs.746 crore write off. Why couldn't SBI get shares worth this amount?
3 years ago
Is SBI a Dharamsala for giving donations to rich people by robbing the middle class taxpayer and also senior citizens who solely survive on the bank interest. Part of the written of amount might have gone to political parties ,Babus , bank executives who are in connivance with suit boot industrialists.It is a joint" loot and share "program.
3 years ago
Welcome to Babugiri Liberalised India Aam Aadmi banking services charged in pennies 1 Re pens tied downs 7% loan recoveries done all automated processes Manager's undercuts above in all transactions of loan approvals Global mess in India Royally RBI dossiers? Mahesh Bhatt
3 years ago
7 Lakh Crore Bad Loans Written Off In Decade, 80% Of It In Last 5 Yrs ( This doesn't include FY2020 Figure). In last 8 year country's largest lender SBI manage to recover mere 8969 Crore against 1.23 Lakh crore written off!!
3 years ago
That sum what got wasted away at SBI is more than 3% of our nations annual budget.

Like someone addressed these psu bankers a while ago, a group of heartless bankers.

They should be asked to quit their jobs in shame for failing the trust of this great nation and its people.
Replied to mywopy comment 3 years ago
Thanks for your comment. It had a deep insight with the reasons for the NPA. There is also another serious one and that is corruption with the connivance of the Bankers. They granted these loans by taking kickbacks.
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