Last year, the Union Minister of State for Finance Bhagwat Karad had informed the Lok Sabha in a written reply that Scheduled Commercial Banks had written off bad loans worth Rs14.56 lakh crore since financial year 2014-15. Of the total written off amount, Rs7.40 lakh crore were of large industries and services.

The total recovered bad loan from the written off amount in 2023-24 was only Rs 46,036 crore, when added to Rs 2.04 lakh crore of recovery between 2014-15 to 2022-23, it comes to only 2.50 lakh crore. It means the total amount siphoned out from the banks was Rs 13.76 lakh crore during PM Narendra Modi’s regime.

We now see how the corporates, businesses, and the government officials in connivance with the political leadership in power have been fleecing the public deposits in the scheduled commercial bank., Union Minister of Finance Nirmala Sitharaman has recently asked banks to bring innovative products and raise deposits from public in order to overcome the mismatch between deposits and lending.

Addressing the meeting with members of the Reserve Bank of India’s Central Board of Directors on August 10, Sitharaman asked banks to come up with “innovative and attractive” deposit schemes to mobilise funds from the people. It is also worth noting that on August 8, RBI Governor, Shaktikanta Das had expressed concern of deposit-lending mismatch in the banking sector. He recounted other issues too, and warned, “This, may potentially expose the banking system to structural liquidity issues.” Therefore, banks should focus more on mobilization of household financial savings.

We don’t need more proof than the statements of the Union Finance Minister and RBI Governor about the crisis in which our banking system has landed into. People don’t have surplus money to deposit in banks and hence there in low deposit level. Moreover, Banks have been offering very little interest rates that have been not enough to offset even the high rate of inflation. There have been times under Modi regime when bank interests were less than the rate of inflation meaning thereby people were even losing on their deposits.

RBI Governor Das said addressing the meeting, “Interest rates on deposits, lending are deregulated,” adding, “banks are free to decide rates”. Even though, it may not be enough, since people have considerably lost confidence on the banking system in the country ever since demonetization in November 2019, when people did not get their own deposited money in the time of need. No wonder, rich people are looking for other avenues to secure their money, including in gold and land purchases, which the poor people are struggling to meet their unavoidable expenditure, such as in health and food.

People are heard saying that Modi government has no more interest than taking out money from even those who don’t have enough to even maintain their minimum balance in their account. Should the deposit money in banks only to be taken away by or given to the corporate and business in the form of loans, not to be returned but to be written off after some time? They even give little interest to depositors and fleecing the deposits at their cost.

It is in this situation NPAs of Scheduled Commercial Banks (SCBs) have been very high. The reply of the Union Minister of State for Finance Pankj Chaudary’s in Rajya Sabha, revealed that NPAs of SCBs stood at Rs4.80 lakh crore as on March 31, 2024, while 1.70 lakh crore were written off. Gross NPAs in the SCBs have been declining over the past five years, Chaudary said.

While giving data of the last five years he said that against Rs9.9 lakh crore write-off, recovery was to the tune of Rs1.84 lakh crore. It is just 18 per cent of total write-off, though he claimed that such write-offs do not result in waiver of liabilities of borrowers to repay and therefore, write-off does not benefit the borrowers.

Banks evaluate/consider the impact of write-off as part of their regular exercise to clean up their balance-sheet, avail tax benefit and optimize capital, in accordance with the guidelines of RBI and policy approved by banks boards, and after four years of non-repayment of loans, these are removed from the balance-sheet of the banks concerned.

However, it is well known that the Union Government and the RBI, keep the big corporate and business borrowers’ and defaulters’ name secret. Therefore, no one known which big corporate and businesses were favoured by the Modi government in this write-off loan business. Not long back, only in December 2022, Union Ministry of Finance had informed the Parliament with regard to the list of defaulters who defaulted more than Rs1 crore to the public sector banks that RBI does not maintain borrower wise information on such write-offs.

Swindlers of the public money deposited in banks have been active and there seems to be no check on them, which can’t happen without connivance of corporate, business, banks, and the government. Even in the last year of the second term of PM Narendra Modi, a scheme was proposed by the RBI that the defaulters may be allowed compromise settlement and even fresh loans in the ‘interest of public’ rather than much desired actions against the swindlers of bank money and the conspirators therein. (IPA Service)