State Bank of India Writes Off Rs1.45 Lakh Crore Bad Loans of Big Defaulters since FY14; Refuses To Share Names
State Bank of India (SBI) has again refused to share the names of borrowers who owe Rs100 crore or more, even with its shareholder. Over the past nine years, from FY13-14 up to FY21-22, SBI has written off bad loans of over Rs145,248 crore of big defaulters, while recovering just over 13% from them.
 
SBI told social activist and shareholder Vivek Velankar, "The Bank is under statutory and regulatory obligations to maintain confidentiality of customer data, hence information sought cannot be disclosed."
 
 
The stubborn refusal to share information by SBI and other public sector banks (PSBs) is surprising since they have no problem with confidentiality when it comes to small borrowers. All lenders regularly publish recovery advertisements in the newspapers with personal details and photos of smaller borrowers who have defaulted. The stubborn protection to big borrowers or large defaulters under various pretexts is baffling. 
 
Many people, including Mr Velankar, have filed numerous applications under the Right to Information (RTI) Act with PSBs, to make the names of big defaulters public. But, so far, banks have refused to share names of big defaulters citing 'confidentiality of customer data'. Maybe the confidentiality clause is applicable only for big defaulters and not small borrowers, whose details and photos keep appearing in newspapers along with recovery notices. 
 
After failing to obtain the list of names of big defaulters in 2020, Mr Velankar asked for the information from SBI just before its annual general meeting (SBI). At that time, SBI had shared names of big defaulters, Alok Industries Ltd, Bhushan Power & Steel Ltd, IRVCL Ltd and Videocon Industries Ltd. (Read: SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Paltry Rs8,969 Crore in 8 Years!)
 
However, in 2021, SBI simply refused to share the names of big defaulters with its own shareholder. In a reply, Sham K, assistant general manager for compliance and company secretary of SBI, told Mr Velankar, "As Bank is under statutory and regulatory obligations to maintain confidentiality of customer data, the Bank is not in a position to share the account or customer-specific information." (Read: SBI Takes a U-Turn. Turns Down Shareholder's Demand To Reveal Names of Big Defaulters
 
He is the same official from SBI who has refused to share the list of big defaulters this year too. Further, Mr Sham K also declined to provide information on loans of Rs1 crore and below written off and recovery by the Bank since 2013. 
 
"The information is not centrally collated and maintained by the Bank," he told Mr Velankar in a written reply. 
Mr Velankar, who is also president of Pune-based Sajag Nagrik Manch, says, "Two years ago, SBI had shared names of 225 big defaulters with me as a shareholder. However, after that, the Bank denied divulging the names of big defaulters. Does this mean that SBI's definition of confidentiality of defaulters keeps changing every year? And why keep hidden names of big borrowers who had defaulted and since there is no hope of recovery, the Bank has technically written off the debts?"
 
He also searched annual reports of SBI for the past nine years. "I found that since FY14, SBI wrote off bad debts worth Rs278,605 crore while recovering just Rs54,205 crore from these defaulters. The Union government has set up National Asset Reconstruction Ltd (NARC) as a bad bank to buy illiquid and high-risk assets (typically non-performing loans-NPLs) held by a bank or a financial institution. However, looking at the huge size of written-off debt by SBI, the government would have to set up another bad bank just for the Bank," he says. 
 
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 followed 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.
 
All this shows an underhand nexus between the banks and the defaulters as a distinct possibility and merits investigation at the highest level.
 
You may also want to read our exclusive coverage on bank loot
 
Comments
dipankarmnm
1 week ago
Bank is the custodian of our money for which they're paid heavily. They can not refrain from disclosing the names of the business people who have failed to pay back the dues. Their properties to be confiscated and they must be imprisoned. How Bank sanctioned their loans. Accountability must be there. Our MPs must ask in parliament and the president. They must be booked. Even PM or anybody can not do unilaterally.
shashidharakula740
3 weeks ago
We must file case against in hounarable supreme court and must teach nice lession to them.If not we will seaged to pay our monthly emi especially who availed loans from SBI.
bankretirees
3 weeks ago
During the last eight years public sector banks were giving cheap loans to the corporate defaulters without following lending norms on the strength of the immunity scheme announced by the PM to promote his fake development agenda and created 45 lakh crores of bad loans with the banks forcing the banks to incur loss . This has facilitated merger and privatisation and the bank CEOs are now busy in writing off all the bad loans and giving fresh loans to the corporate defaulters in various different names. This national loot has resulted in SBI giving 1.45 lakhs of write off to corporates calling it as a "hair cut" a code name for such pampering the rich. The information is confidential. At the same time SBI has leaked confidential customer data relating to 5 crores deposit customers to private outsourcing agencies for a fabulous price making the balance in their accounts vulnerable to hackers. It is strange that the judiciary is remaining silent instead of acting against the erring bank officials.
ASHWIN MEHTA
Replied to bankretirees comment 6 days ago
Judiciary ?? Is it exist in INDIA ?? I am having my own doubts. Till you spend time and money for all this, they can neither see, nor listen. Deaf and Dumb.
lalarajeev
Replied to bankretirees comment 1 week ago
Can you prove this, bcoz it is factually incorrect...banks had to be restructured due to loans going bad prior to '14...last few years, very low on loan grants
Adit
3 weeks ago
So I think this amount will be spread over 45 Crore customers of SBI and gets their money back. All banks do same. If a common man default for 1 or 2 EMIs their recovery agents, manage, etc will pest. This is all big babus tamasha.
sukant.0106
3 weeks ago
Government of India today is making corrpution validated at policy making level. No subsidies for poor sick and old people, middle class , only Benefit transfer before election, but sops , tax breaks, write-offs for big corporate honchos , without stating facts why such policies are being persued. Today Ashok stambh looks like "Krur singh"
saharaaj
3 weeks ago
now file case in Supreme Court
rmganatra
3 weeks ago
Thanks for the incisive article. PSBs are unguarded treasures which are nibbled inside out. The massive write offs do not impact the bank managements.

After write off, though the recovery action continues, the tail recovery is by and large insignificant.

No wonder PSBs are being privatised.
chandruvalli98
3 weeks ago
Sir i have a ppf ac with sbi,tirunelveli junction branch.
I made a partial withdrawal of Rs.2.5 lakhs.since i have no sb ac with sbi they gave me bankers cheque .
For issuing bankers cheque they charged Rs.1000.
This is the fate of pitiable indian citizen.
Those who loot are given red carpet welcome.
Those who save for their future is being punished.
This is what DIGITAL INDIA under BJP.
LONG LIVE DEMOCRACY FOR HAVES.
VN KULKARNI
3 weeks ago
LEAVE SOME LOANS OUTSTANING IN THE BALANCE SHEET TO EARN INTEREST TO PAY DEPOSITORRS INTEREST! DICGC WILL CRUMBLE IF ANY THING GOES WRONG WITH SBI. (TOO BIG TO FALL?)
ASHWIN MEHTA
Replied to VN KULKARNI comment 6 days ago
Agree. But why allowing it to become that BIG in the first place. They also must have heard : ANY THING IN EXCESS IS POISONOUS. !!!!!!!!!!
shaileshgan
3 weeks ago
This information was held to be disclosable by RBI according to my order in PP Kapoor's case. The decision was upheld be the Supreme Court
tapanksur
3 weeks ago
Wow this is exactly what is called ease of doing business, and why every business man in the universe & The Aliens from above would like come to us for this ease of business, so that they can all enjoy the sun in some Carribean sea shore, so easy & good!
suganjeyan
3 weeks ago
SBI's intransigence of not revealing the beneficiaries of writing back of 1.4 lakh crs of loan bulldozes its credibility. The commoners' deposit gifted to faceless big houses is a dent on Indian economy and the role of NDA rulers the architect behind the clandestine action is deplorable
birendra2504
3 weeks ago
The transparency of the big defaulters will be in public as because these defaulters are no longer honest and the deals are also termed as dishonest ..
S.SuchindranathAiyer
3 weeks ago
SBI acknowledges having gifted 14,,500,000, 000 Crores of public money to Crony Capitalists. Now you know why the banks pay interest to senior citizens and unemployed on the deposits far below the real inflation rate. A Modiform tax on the poor to benefit the wealthy:
chandruvalli98
Replied to S.SuchindranathAiyer comment 3 weeks ago
Good comment .The highlight of your comment is "MODIFORM TAX" on the poor.
Please read my comment in this column and know how depositors are crushed by SBI .
Rob peter pay pal.
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