Search
FinMin wants PSU banks to enhance recovery rate from written off accounts
May 02, 2023
Worried over the low recovery rate from written-off accounts, the Finance Ministry has asked state-owned lenders to increase it to about 40 per cent, sources said.
Currently, the recovery rate from written-off accounts is less than 15 per cent. Public sector banks (PSBs) could recover only 14 per cent of the written-off loans worth ₹7.34 lakh crore in the last five years ended March 2022.
Of ₹7.34 lakh crore written-off loans, state-owned lenders recovered ₹1.03 lakh crore. So after recovery, the net written-off stood at ₹6.31 lakh crore at the end of March 2022.
It seems that after the write off banks get complacent about recovery from those non-performing assets (NPAs), the sources said, adding, this level of recovery is not acceptable.
Besides, they said, higher recovery from written-off accounts directly adds to their bottomline and improves their capital.
To review the situation on the issue, the sources said, the Department of Financial Services would soon hold a meeting with senior officials of PSBs.
The proposed meeting would take stock of pending cases with regard to such accounts in various courts, including Debt Recovery Tribunal and Debt Recovery Appellate Tribunal.
Important Links:
- 4-IN-1 Professional Diploma in Banking, Financial Services & Insurance (PDBFSI): https://ask.careers/courses/4-in-1-professional-diploma-in-banking-financial-services-insurance-pdbfsi/
- Mumbai: https://ask.careers/cities/mumbai/
- TSCFM: https://ask.careers/institutes/tscfm/
