The public sector banks (PSBs) have recovered ₹6.42 lakh crore of non-performing loans and written-off loans since FY15 and filed suits against 98.5% of wilful defaulters, data available with the government showed.
Over FY16 to FY21, the government has infused ₹3.36 lakh crore of capital in PSBs while the banks themselves have raised an additional ₹2.99 lakh crore from the markets.
The provision coverage ratio of the PSBs, a measure of health that captures amounts set aside to cover bad loans, has improved to 86.9% at the end of March 2022 from 46% at the end of March 2015.
The state-run banks have recovered ₹5.17 lakh crore in non-performing assets (NPAs) and ₹1.24 lakh crore in written-off accounts since FY15.
The gross NPA ratio of PSBs has fallen from 14.6% on March 31, 2018, to 7.4% on March 31, 2022, while the net NPA ratio declined from 8% to 2% over this period. Stressed assets are down from 15.3% to 8.7%.
“Banks continue to pursue recovery actions initiated in written-off accounts through various recovery mechanisms available,” a senior government official said.
These include recovery suits in civil courts or Debts Recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, 2016, or through negotiated settlement/compromise, and through the sale of NPAs.
The occurrence of fraud as a proportion of the gross advances of PSBs dropped from a peak of 1.32% during the financial year 2013-14 to 0.05% during the financial year 2021-22.
“The improved detection and reporting accompanied with the comprehensive steps taken to check frauds have resulted in a decline in the occurrence of such frauds,” the above-quoted official added.
Out of 12,265 designated wilful defaulters as of March 31, 2022, suits have been filed against 12,076 (98.5%), FIRs have been lodged against 40.2% and SARFAESI action initiated against 75.5%
“The government has further provided a conducive business environment and healthy competition which has encouraged private sector banks to flourish in the country,” the official said pointing to the fall in the share of PSBs in gross advances from 74.29% in 2014-15 to 58.34% in 2021-22.