Only two large loans given by public sector banks in the last three-and-a-half years have turned bad, the government has informed the Parliament.
In a written response to a question in the Rajya Sabha on December 20, Finance Minister Nirmala Sitharaman said that starting April 1, 2019 and until September 30, 2022, only two loans of more than Rs 100 crore sanctioned by public sector banks had been classed as non-performing.
Of these two loans, one amounting to Rs 297 crore given by Punjab & Sind Bank, has been fully recovered.
"One account which slipped into NPA stands upgraded to regular in FY21-22," Sitharaman's answer added on the second loan, which was sanctioned by State Bank of India.
The answer did not specify the precise size of the second loan.
As per the data provided by Sitharaman, public sector banks sanctioned a total of 9,650 loans of more than Rs 100 crore in the last three-and-a-half years: i) 2,084 in FY20 ii) 2,575 in FY21 iii) 2,780 in FY22 and, iv) 2,211 in the first half of FY23.
Both the aforementioned loans were sanctioned in FY21.
The performance of the banking sector has been a sparring point between the government and the Opposition for several years, with Indian banks seeing a sharp rise in their bad loan ratios in the aftermath of the global financial crisis. The ruling Bharatiya Janata Party has argued that this was due to the close links between the then government and public sector banks.
However, the Opposition has pointed to the large number of loans written off by banks in recent years.
The finance ministry informed the Lok Sabha on December 19 that Indian banks wrote off loans worth more than Rs 10 lakh crore during the last five financial years.
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