Banks Lost Rs 2.85 Lakh Cr Due To Bad Loans Of 13 Firms; SBI #1 At Rs 34,000 Crore Loss

Public sector banks have lost nearly Rs 2.85 lakh crore owing to loan dues of 13 corporates.

How It Happened

The losses rained down even though banks typically bail out ailing financial institutions such as Yes Bank and IL&FS, United Forum of Bank Unions (UFBU) alleged.

Data provided by UFBU says that outstanding dues of the 13 corporates were at Rs 4,86,800 crore.

It was resolved at Rs 1,61,820 crore, resulting in a loss of Rs 2,84,980 crore.

SBI #1 At Write Offs

Banks wrote off Rs 2,34,170 crore in FY 2019-20, Rs 2,36,265 crore in FY 2018-19, Rs 1,61,328 crore in 2017-18 and Rs 1,08,373 crore in 2016-17, the RBI said.

Almost 75% of the write-offs are done by PSBs which help make their loan book and balance sheets decent.

Five banks, led by State Bank of India (SBI), wrote off Rs 89,686 crore in the fiscal ended March 2021, with SBI accounting for Rs 34,402 crore.

Nationwide Strike

UFBU’s Convenor B Rambabu said that the organization will go on a two-day all India bank strike on December 16 and 17.

The cause they are protesting is the Banking Laws (Amendment) Bill 2021 and the Centre’s drive to privatise PSBs.

Always Rescuing Private Banks

Rambabu lamented that PSBs have bailed out ailing private sector banks on multiple occasions. 

The accused banks he named are Global Trust Bank, United Western Bank, Bank of Karad and recently Yes Bank, which was bailed out by public sector SBI.

SBI and LIC also bailed out the private sector’s largest NBFC, Infrastructure Leasing & Financial Services (IL&FS).

Assisting The Government

Apart from that, PSBs also participate in majority of the government programmes and schemes such as Jan Dhan, MUDRA for unemployed youth, Swadhan for street vendors, Pradhan Mantri Awas Yojana and Pradhan Mantri Jivan Jyoti Yojana, among others.

Due to the crucial role of PSBs in the government and the economy, privatising them will, in their view, “jeopardise the interests of the common people and backward regions of the country”.

Therefore, they will go on strikes to protest the government’s move to push the Bill in the Parliament which would privatise the banks.