The apex court asked the RBI to share its record about cases where loans of Rs 500 crore or more have been written off by public sector banks.
The Supreme Court on Tuesday took suo moto cognizance of newspaper reports on bad loans and has, therefore, directed the Reserve Bank of India (RBI) to give it the list of the biggest defaulters.
The apex court asked the RBI to share its record about cases where loans of Rs 500 crore or more have been written off by public sector banks.
Also read: 27 public sector banks write off Rs 1.14 lakh crore bad debts during 2012-15
The Supreme Court has given the RBI six weeks to come back to it with a response.
The financial performance of state-owned banks has a shadow over them due to mounting bad loans.
The country's largest lender, SBI, has reported a sharp decline in net profit. Another major lender is the Bank of India which recently posted losses for the third quarter of current fiscal.
Banks are creaking under the burden of their bad loans. By end of December 2015, loans worth over Rs 7 lakh crore have gone under stress -- classified either as non-performing as borrowers have not repaid the principal or the interest for over 90 days, or restructured where the banks have given the borrowers a longer tenure to repay the loans. This includes about 6% of the gross NPAs and 5.1% of standard restructured assets.
What is more, about 25 banks together have written off Rs 25,000 crore loans in the third quarter. Of this, seven banks wrote off Rs 11,811 crore worth of loans alone in the third quarter that ended December 31, 2015.
Hit hard by mounting bad loans, many leading public sector banks (PSBs), including Bank of Baroda, Bank of India and IDBI Bank, reported their highest ever quarterly losses aggregating to over Rs 12,000 crore, while others like State Bank of India (SBI) and Punjab National Bank (PNB) witnessed sharp erosion in profits.
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