Is it true that the total NPA write-offs by Indian banks have come down in the Dec-20 quarter?

The Minister of State for Finance, Anurag Thakur, revealed some interesting statistics about banking NPAs in the 9 months to December 2020. In a recent data release, the RBI has disclosed that the scheduled commercial banks or the SCBs had written off loans worth Rs.115,038 crore in the first 3 quarters of FY21. This is sharply lower than what the banks had written off to the tune of Rs.235,000 crore per year in the previous 2 fiscal years.

This data was disclosed by Anurag Thakur when answering specific questions on the issue of NPAs in the lower house of the Indian Parliament. However, Thakur has also clarified that those borrowers whose loans were written-off, would still be liable for repayment and these write-offs were only an accounting adjustment and not an indication of settlement of loans at a lower level. Hence the recovery efforts by the banks would continue.

Today, banks have a number of recovery mechanisms at their disposal like the DRT, SARFAESI Act 2002 and NCLT 2016. In the last 3 financial years, banks had successfully managed to recover a sum of Rs.368,636 crore which included Rs.68,219 crore from written off loan accounts. Thakur underlined that total NPAs of the banks had fallen by 27% to Rs.756,560 crore as of Dec-20. However, the pandemic moratorium had not been factored.