India’s largest public sector bank SBI cleaned up its balance sheet by writing off loans worth Rs 7016 crore owed to it by more than 60 of its top 100 defaulters.
63 accounts have been fully written off, 31 have been partially return off and six of them have been shown as non-performing assets (NPA), documents exclusively accessed by DNA revealed.
While the government started demonetisation move in the sake of targeting the black money holders, the public sector banks were dropping off the defaulter’s money into a specially created dustbin of toxic loans called Advanced Under Collection Account (AUCA).
King fisher Airlines by Vijay Mallya, a businessman who successfully absconded to London, topped the list with outstanding dues of almost Rs 1,201 crore. KS Oil (Rs 596 crore), Surya Pharmaceuticals (Rs 526 crore), GET Power (Rs 400 crore) and SAI Info system (Rs 376 crore) were the other top defaulters.
As on June 30 2016, the bank had written off almost Rs 48,000 crore worth bad loans. SBI has put all such account into AUCA.
“The main advantage which the bank will have by transfer to AUCA is that banks gross NPAs amount and net additions in NPAs during the quarter will be reduced to the extent of the amount of transfer to AUCA. It will bring down gross advance by the same amount,” The internal report accessed by DNA correspondent stated.
Meanwhile, Finance Minister Arun Jaitley said in Rajyasabha that a write off doesn’t mean the bank was not going to pursue it and he added that the NDA government had inherited a legacy of bad loans.
CP(I)M general secretary Sitaram Yechury said that the loan “is something that is not going to be realized.”
