New Delhi, July 27 (UNI): State Bank of India topped the list of public sector banks writing off loans in FY21 followed by Union Bank of India.
While SBI removed Rs 34,402 crore from its balance sheet, the Union Bank of India wrote off Rs 16,983 crore during the last fiscal.
As per a written reply in the Rajya Sabha by Finance Minister Nirmala Sitharaman, Punjab National Bank (PNB) wrote off Rs 15,877 crore in FY 21 and came third in the list as bad loans piled up.
Following RBI guidelines, banks remove bad loans from their balance-sheet by way of write-off.
They carry out this exercise regularly after assessing the impact of such write-offs to avail of tax benefit and optimise capital.
Prudential or technical write-off does not result in waiver of liabilities of borrowers to repay.
“As borrowers of written-off loans continue to be liable for repayment and the process of recovery of dues from the borrower in write-off loan accounts continues, write-off does not benefit the borrower,” said the finance minister.