Banking

SBI Wrote Off Rs 200 Billion Worth of Bad Loans in FY17

PSBs had a collective write off of Rs 816.83 billion for the financial year 2016-17.

A security personnel stands guard in front of the gate of the State Bank of India (SBI) regional office in Kolkata May 23, 2014. Credit: Reuters/Rupak de Chowdhuri/Files

A security personnel stands guard in front of the gate of the State Bank of India (SBI) regional office in Kolkata May 23, 2014. Credit: Reuters/Rupak de Chowdhuri/Files

The country’s largest lender, the State Bank of India, wrote off bad loans worth Rs 203.39 billion in 2016-17, the highest among all the public sector banks. PSBs had a collective write off of Rs 816.83 billion for the financial year.

The data pertains to the period when the associate banks of SBI were not merged with it.

PSB’s write-off stood at Rs 272.31 billion in 2012-13, government data showed.

The figure has jumped nearly three-fold in five years.

In 2013-14, the state-owned banks wrote off bad loans worth Rs 344.09 billion; Rs 490.18 billion in 2014-15; Rs 575.85 billion in 2015-16 and hitting Rs 816.83 billion in the fiscal ended March 2017.

Besides SBI, Punjab National Bank had a write-off of Rs 92.05 billion in 2016-17, followed by Bank of India (Rs 73.46 billion), Canara Bank (Rs 55.45 billion) and Bank of Baroda (Rs 43.48 billion).

In the current financial year, PSBs have written off loans worth Rs 536.25 billion in the six months to September.

As per data from the Reserve Bank, nine PSBs, out of the total 21, had gross non-performing asset ratio of above 15% (the percentage of bad loans in terms of total loans outstanding) as of September 30, 2017.

Fourteen PSBs have gross non-performing asset ratio of over 12%. PSBs are faced with mounting non-performing assets (NPAs) or bad loans, putting the financial sector under stress.

The government has unveiled a Rs 2.11 trillion capital infusion plan for the PSBs, including via bonds, in the next two years.

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