Government banks can run a special drive for loan recovery very soon. Image Credit source: File Photo
Government banks across the country can run a special drive for loan recovery very soon. Banks have written off loans worth lakhs of crores of rupees so that they can improve their balance sheet. At the same time, according to the rules of RBI, to keep their accounts clean, banks make a separate provision for the amount of stranded loans ie NPA.
But now it is not going to last long. The government has told the banks to put their loan recovery process on a fast-track. Recover this write-off loan as soon as possible.
See also: This special bond of RBI can give more returns than FD
8.16 lakh crores are written off
ET has reported quoting sources that public sector banks have been given a target to recover written-off loans of at least Rs 2 lakh crore in the current financial year. In the first 9 months of the financial year 2022-23, public sector banks have removed Rs 90,958 crore from their accounts, that is, they have been written-off.
Let us tell you that in the 6 years before 2021-22, public sector banks had written off a total of Rs 8.16 lakh crore of bad loans. While all the commercial banks of the country have written-off accounts of Rs 11.17 lakh crore.
Read this also: Banking crisis in America and Europe, RBI warns domestic banks
Banks will decide their own target
An official source having information about this said on the condition of anonymity that no separate target has been given to the banks. Rather, each bank will fix its own target as to how many loans it is going to recover in the current financial year.
The borrower cannot escape from the bank’s write-off of any loan. He has to pay this loan to the bank even then. Banks write-off a loan only to keep their balance sheet clean.