Page 27 - Banking Finance April 2025

ARTICLE

Linked Incentive (PLI) scheme by Government of India, tions to economic growth, social progress, technological
amounting to approximately Rs 26,000 crore for the advancement, and environmental sustainability are indis-
Auto and Auto Components sector not only promotes pensable in realizing the vision of 'Vikshit Bharat' by 2047.
manufacturing but also incentivizes hydrogen vehicles. MSMEs are the cornerstone of the Indian economy, driving
growth, generating employment, and fostering innovation.
Significant investments are being made in the MSME
sector, with states like Maharashtra, Tamil Nadu, and
To fully realize the potential of MSMEs in making Viksit
Gujarat demonstrating substantial pledges for growth. Bharat, it is crucial to create a conducive ecosystem that
The sector's Gross Value Added (GVA) and export contri- fosters their growth and competitiveness. This includes
butions are monitored, indicating its economic impact. streamlining regulations, improving infrastructure, promot-
The National Education Policy 2020 and the Skill India ing digitalization, and enhancing skill development.
Mission are key initiatives aimed at training and
upskilling youth, which will directly benefit the MSME By addressing the challenges faced by MSMEs, India can
unleash their full potential and empower them to play a
sector by providing a skilled workforce.
leading role in the nation's transformation. By facilitating
The vision for Viksit Bharat includes harmony with na- access to finance, infrastructure, and market opportunities,
ture, which implies that MSMEs will also need to adopt the government and institutions can empower these dy-
sustainable practices to align with this goal.
namic enterprises to reach their full potential and contrib-
ute even more significantly to India's economic future. Viksit
Conclusion: Bharat represents a bold vision for India's future and the
MSMEs are not just small businesses, they are the building success of this vision will depend on the collective effort of
blocks of a prosperous and developed India. Their contribu- the government, businesses, and citizens alike.

Banks wrote off over Rs. 16 lakh crore of NPA between FY15 and FY24

Scheduled commercial banks wrote off over Rs. 16 lakh crore worth of loans during FY15 and FY24, the Lok Sabha
was informed. Also, it was told that nearly two out of five posts at the board level is vacant in 12 public sector banks.

Data presented along with a written response by Finance Minister Nirmala Sitharaman showed that the written off
amount by scheduled commercial banks was around Rs. 59,000 crore in FY15, which rose to over Rs. 1.7 lakh crore
in FY24.
"Banks write-off nonperforming assets (NPAs), including, inter-alia, those in respect of which full provisioning has
been made on completion of four years, as per the Reserve Bank of India guidelines and policy approved by banks'
Boards," Sitharaman said. Further, such write-off do not result in waiver of liabilities of borrowers and therefore,
they do not benefit the borrower.

"Banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanism
available to them, such as filing of a suit in civil courts or in Debt Recovery Tribunals, action under the Securitisation
and Reconstruction of Financial Assets and Enforcement of Security Interest Act, filing of cases in the National Com-
pany Law Tribunal under the Insolvency and Bankruptcy Code, etc.," she said.
There were specific queries regarding write-offs for large borrowers and industrial houses. Quoting RBI, Sitharaman
said information regarding loans written off in respect of corporate houses is not maintained by the Central bank.
However, year wise details of write-off of NPAs pertaining to 'Large industries and Services' and total NPAs written
off by scheduled commercial banks are maintained. Data showed the said amount was over Rs. 9.26 lakh crore or
around 57 per cent of total written off amounts. "With regard to the name of companies, the disclosure of borrower
wise credit information is prohibited under Section 45E of the RBI Act, 1934," she said. As per RBI data, there were
29 unique borrower companies, which have been classified as NPAs and each of them have outstanding of Rs. 1,000
crore and above. Aggregate outstanding in these accounts were over Rs. 61,000 crore.

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