Indian banks have decreased the number of loan waivers in the past year. In FY24, Indian banks have forgiven loans totaling Rs 1.7 lakh crore, which is lower than the Rs 2.08 lakh crore forgiven in FY23 according to the central government.
Union Minister of State for Finance Pankaj Chaudhary provided information
Union Minister of State for Finance Pankaj Chaudhary provided this information while answering a query in the Lok Sabha. During his response in the Lok Sabha, Union Minister of State for Finance Pankaj Chaudhary mentioned that the amount of loans forgiven by banks in the fiscal year 2023-24 is the smallest it has been in the past five years. During the fiscal year 2019-20, banks forgave loans totaling 2.34 lakh crore rupees, whereas in FY21, this amount decreased to 2.03 lakh crore rupees.
During FY22, loans totaling Rs 1.75 trillion were forgiven. In FY24, Punjab National Bank waived loans totaling Rs 18,317 crore, as announced by the government. Union Bank of India received Rs 18,264 crore, followed by State Bank of India with Rs 16,161 crore. HDFC Bank waived loans worth Rs 11,030 crore in the private sector, while ICICI Bank waived Rs 6,198 crore and Axis Bank waived Rs 8,346 crore.
Accordance with Reserve Bank of India (RBI) regulations
In accordance with Reserve Bank of India (RBI) regulations and bank board-approved policies, banks disclose information on non-performing assets in full compliance with the rules. This kind of exemption does not imply the forgiveness of the borrowers’ loans. Pankaj Chaudhary also mentioned that the waiver does not provide any relief to borrowers, so the loan recipients do not gain any advantage from it. The borrowers are still accountable for repaying the loan and the financial institutions.