New Delhi, Oct 31 (KNN) The Federation of Punjab Small Industries Associations (FOPSIA) has said that the Write Off of Non-Performing Assets (NPA’s) are leading to corruption in many cases.

On the name of cleaning the balance sheet, a big scam of “write off” is going on in the nationalized Banks.

The banks are settling the NPA accounts by giving a big relief of exemptions to the big borrowers in the form of write offs.

In the year 2017-18 the Banks had write off 144093 crores of loans in this amount 120165 crore is of Nationalized Banks and 23928 Crores is of private banks.

FOPSIA said, "In Last four years of Modi Government, Banks write off 357341 crores of Loans. Whereas the write off of Last six years of UPA government from 2008-09 to 2013-14 was 122753 Crores. By the end of March 2018 the NPA of the Banks was 10,35,528 crores."

Whereas, instead of taking a stringent action against the willful defaulters, the Banks are busy in minting money by write off their huge amounts, the association said.

SBI alone has written off bad loans of Rs 40,196 crore, nearly 25 per cent of the total write-offs during 2017-18.

This was followed by Canara Bank (Rs 8,310 crore), Punjab National Bank (Rs 7,407 crore) and Bank of Baroda (Rs 4,948 crore). 

In the year 2017-18 the government instructed the Banks for the CBI investigation of NPA loans above 50 crores, the federation pointed.

But to save their skin the banks choose the formula of write offs. In many cases the settlements were done merely by taking the 25% to 50% of total NPA amounts.

Even the Parliamentary standing committee stated in its report “write-offs by public banks have grown faster than outstanding loans. In the last quarter of 2018 there was a 37 per cent rise in write-offs while there was just 4.5 per cent rise in the loans issued by public banks”, the association noted.

Fopsia said that in Punjab many banks are offering safe passage to NPA companies by writing off their heavy amounts. The top in the list are Steel, Power, Textile and infrastructure companies.

In many cases the banks recovered even 25% of the total loan as settlement amount whereas the assets of those companies were very high, ut added.

FOPSIA said the NPA of Ludhiana alone has crossed more than 10000 crores and many big companies are in touch with the top bank officials to settle their accounts merely by paying 25% to 30% of the total NPA amount.

The banks are ignoring the guidelines of ministry of finance while doing these write off’s.

As per CAG report the RBI failed to control the Banks for the NPA & write off issues, whereas it was the duty of RBI to monitor the whole banking finance system, said FOPSIA.

FOPSIA had made a list of many such settlements and the same has been sent to the ministry of finance for its investigation by any agency.

It is felt that in many cases there could be the chances of corruption in offering the write off’s.

The NPA and the write off scam of Banks may destroy the economy of India in the coming years.

The banks are maintaining secrecy in NPA accounts and its settlements, the associatuon said adding that the banks even refuse to provide any information under RTI for such NPA or settlements of accounts.

In many cases the Banks merely got 20% of their loan amounts by selling the assets of the NPA accounts, it said adding that many of these willful defaulters have purchased the properties in other countries and just waiting for the decision of the banks for final settlement of their accounts.

FOPSIA has demanded a strict enquiry against such account holders where the amounts settled against the loans is less than 75% of the total outstanding amounts.