NPA Scam SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Rs 8,969 Cr

NPA Scam SBI Writes Off Rs1.23 Lakh Crore of Bad Debt, Recovers Rs 8,969 Cr

Friday, July 17, 2020

I always say and today also I will begin with same words, line 

NPA or Bad Debt, written off loan is nothing but a legal scam, a corruption done by corrupt officers. India does not need provision of NPA or method of writing off loans.

rule needs to be simple liya hai toh dena padega nahi toh jail jana padega

Indian government and others always say that bad loans written off does not mean a waiver

They are recovered in future.

loan write-off means you never took loan and we never gave you loan let us enjoy and forget the bad loans, come to bank again we will give you new loan of 1000 crore or more whatever you want.

Technically speaking, when debts are written off, they are removed as assets from the balance sheet because the bank does not expect to recover payment

in April, the Reserve Bank of India (RBI) had said that Indian banks have technically written off a staggering amount of Rs68,607 crore due from 50 top willful defaulters, including absconding diamantaire Mehul Choksi. RBI had revealed this information in reply to an RTI filed by Saket Gokhale. RBI said that this amount (Rs68,607 crore) comprising outstanding and the amounts technically or prudentially written off till 30 September 2019. 

Few names of the companies mentioned in top 50 defaulter companies 

Gitanjali Gems Ltd, which owed Rs5,492 crore, besides other group companies, Gili India Ltd and Nakshatra Brands Ltd, which had taken loans of Rs1,447 crore and Rs1,109 crore, respectively.

documents procured by Vivek Velankar from State Bank of India (SBI) shows that SBI write off of Rs.1,23,432 crore, but SBI has recovered only 7% or Rs. 8,969 crores over the past eight financial years.

Mr Velankar, president of Pune-based Sajag Nagrik Manch, told to media, "I tried obtaining this information under Right to Information (RTI) Act, but SBI denied it claiming that collating this information would be a waste of its resources. Being a shareholder of SBI, I then asked for this information as question for the annual general meeting (AGM). I did not get a chance to ask my question during the AGM, but the bank shared this information, which is quite shocking. This also exposes how the bank writes off loans of 100s of crores of rupees of large defaulters while denying waiver of simple interest on loans for common customers."

The Bank’s reply to Mr Velankar shows that during the eight years from FY 12-13 to FY 19-20, SBI has 'technically/prudentially written off’ a massive sum of Rs 1.23 lakh crore from its books, but managed to recover only 7% or Rs8,969 crore in this period. 

This exposes the government and banking system in India which always say that a ‘technical’ write-off does not stop the recovery process. 

The fact is that once a loan turns bad in India, it is almost impossible to recover anything

In FY 2019-20, SBI wrote off Rs 746 crore of non-performing assets (NPA) of Ruchi Soya Industries and has not recovered a single rupee from the company. 

The plan approved under the Insolvency & Bankruptcy Code (IBC) had indicated that SBI would recover Rs 883 crore against its admitted claim of Rs 1,816 crore. 

Instead, it made a fresh loan of Rs 1,200 crore to Baba Ramdev-led Patanjali Ayurved to help it acquire the company. 

In fact, several banks led by SBI had made claims of over Rs 12,146 crore against Ruchi Soya before the bankruptcy courts. 

SBI had the highest exposure of Rs 1,800 crore, followed by Central Bank of India (Rs 816 crore), PNB (Rs 743 crore), Standard Chartered Bank India (Rs 608 crore) and DBS (Rs 243 crore). It would probably be safe to surmise that other public-sector banks (PSBs) in the consortium have made similar write-offs.

After Ramdev Baba bought this company the share price of Ruchi Soya moved from about Rs 3.50 to Rs 1,535

why did not SBI and other banks got the equity shares also transferred in the name of bank as banks decided to forget the loan given to Ruchi Soya

Why did not SBI and other banks took control of Ruchi Soya and later on sold to someone else?

Below is the list names of companies whose loans worth Rs. 500 crore or more were written off by SBI

1. alok Industries Ltd
2. Bhushan power and steel ltd
3. IRVCL ltd
4. Videocon Industries ltd
5. Shree Mahalaxmi Corp P ltd
6. Athena Chhattisgarh Power Ltd
7. VMC systems ltd
8. Coastal Energen Pvt Ltd
9. prayaraj power generation co
10. radical foods ltd 
11. Realiance naval and engg ltd
12. mandhana industries ltd
13. VNR infrastructures ltd
14. parenteral drugs india ltd
15. tgdc guangdong display co ltd
16. jet airways india ltd 
17. aban holdings ltd
18. emc ltd
19. advantage overseal pvt ltd
20. dbm geotechinics and construction pvt ltd
21. castex technologies ltd
22. reliance communication ltd 
23. sterling global oil resources 
24. amtek auto ltd
25. dhanlaxmi solvex pvt ltd
26. shreebankery behari exports ltd
27. sfgc company
28. jr agro tech p ltd
29. svogl oil gas and energy ltd
30. hindustan national gas
31. gujarat nre coke ltd
32. ks oils ltd
33. jai balaji industries ltd
34. wind world india ltd
35. c and c construction ltd
36. ruchi soya industries
37. sharon bio medicine ltd
38. educomp asia pacific pte ltd
39. orchid pharma ltd
40. oceanic tropical fruits pvt ltd
41. jyoti structures ltd
42. fm hammerle textiles ltd
43. adhunik metals ltd
44. rp basmati rice ltd
45. everonn education ltd
46. unity infraprojects ltd
47. asian colour coated ispat ltd
48. rattanindia power ltd
49. spantex netherlands b.v
50. gvr infra projects ltd
51. bilpower ltd
52. bhuvee stenovate pvt ltd
53. shirpur power pvt ltd
54. helios photo voltaic ltd
55. abg shipyard ltd
56. saber papers ltd.

Reality views by sm –

Tags – NPA Scam SBI Loan Written Off Bad Debt Corruption