Union Finance Minister Arun Jaitley said on Tuesday that the Narendra Modi-government has not written off any corporate loans and such assumptions were just “misconceptions”.
“Let me clarify that neither the government nor the banks wrote off any loans,” Jaitley told the Rajya Sabha in response to a question that the government had reportedly written off corporate loans of Rs 55,000 crore (almost $9 billion).
“Only when a loan remains non-performing after four years, and the bank feels that the chances of its recovery are slim, it changes the category of the loan. But the debtor’s responsibility to pay back remains. The bank does this provisioning to get relief in the Income Tax,” he said.
Replying to supplementaries, the Finance Minister said that in the asset quality review undertaken by the Reserve Bank of India (RBI) in 2015, it found that in the non-performing loans there were cases where the banks did aggressive lending, or did not do proper risk assessment and there were also cases of wilful default.