Government Banks: There is good news for those who have accounts in government banks. Finance Minister Nirmala Sitharaman (FM Nirmala Sitharaman) has given big information regarding government bank accounts. The Finance Ministry has expressed concern over the low rate of recovery from written off accounts.
Government Banks: There is good news for those who have accounts in government banks. Finance Minister Nirmala Sitharaman (FM Nirmala Sitharaman) has given big information regarding government bank accounts. The Finance Ministry has expressed concern over the low rate of recovery from written-off accounts. The ministry said that public sector banks should increase it to 40 per cent, sources have informed.
The rate of recovery is 15 percent
Presently the recovery rate from written off accounts is less than 15 per cent. Public Sector Banks (PSUs) have been able to recover only 14 per cent of the amount written off in the last five years ending March 2022. During this, a total of Rs 7.34 lakh crore has been written off. Out of this, PSBs recovered Rs 1.03 lakh crore.
There will be a meeting with the officers of the public sector bank
Sources said that it seems that after writing off the bad loans, the banks get complacent about the recovery from those non-performing assets (NPAs). He said that this level of recovery is not acceptable. Also more recovery from written off accounts directly increases their profits and improves capital. Sources said the Department of Financial Services would soon hold a meeting with senior officials of public sector banks to review the position on the issue.
What is NPA?
NPA means Non Performing Asset means stuck debt. In simple words, you can say that after taking the loan, when the lender is not able to repay the installment, then the money of the banks gets stuck. First an attempt is made to deposit this amount towards the bank but later it is declared as NPA.
RBI gave information
As per the guidelines of the Reserve Bank of India (RBI) and the policy approved by the Boards of Directors of the banks, the Non-Performing Assets (NPAs) have been removed from the books of the respective banks by writing them off. It also includes NPAs for which full provisioning was made.
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