When the Manmohan Singh led Congress government was in power, the BJP sitting in the opposition benches hyped this up as a poll issue. They were at that point on the right track, with the NPAs of state owned banks touching alarming levels.
However, the latest data that has been released by the banking regulator spells doom for most of the state owned banking institutions. One may ask why?
The answer comes very simple. While over the past one decade, the quantum of funds that went into the written off category stood at INR 11.68 lakh crores, a lion’s share of this amount, INR 10.72 crores entered this category post the Modi government assuming power at the Centre, meaning after the financial year 2014-15.
The recent data released by the RBI disclosed that the proportion of write-offs has risen by more than three-and-a-half times ever since the ruling BJP took reins of the treasury benches in parliament.
Why is the government permitting such a huge volume of write-offs?
It’s a known fact that once a huge loan sum is projected into the written-off category, it helps the state owned bank to come out with a refined balance sheet that reflects a far lower percentage of Non Performing Assets (NPAs).
The process has also another sinister aspect that dwells with the state owned banks behaving compliantly with the big borrowers who coerce them into write-offs. They resort to harassing medium and small time borrowers to make it look as if their recovery department is doing its job well.
Only small time borrowers get under the scanner
Banking chiefs and politicians continue to rob public money
BJP regime has witnessed steep hike in PSU bank write-offs
Absolute lack of transparency kills banking institutions
