New Delhi. Union Finance Minister Nirmala Sitharaman on Monday clarified in the Lok Sabha that writing off loans does not mean loan waiver. The Finance Minister, while answering the question of Sriperumbudur MP TR Baalu during the Question Hour in the Lok Sabha, said that the banks make provision for the outstanding amount of Non-Performing Assets (NPA) under the accounting process, the same process is called writing off. .
He said that even after writing off the loan, efforts are being made to recover from the defaulter. He said that many public sector banks have received loan amount by way of assets and securities of such defaulters.
The Union Minister pointed out that during the tenure of the United Progressive Alliance government, there have been many cases of loans being released as NPAs. Loans were never recovered from such defaulters and their money was never received by the banks.
He said that for the first time action is being taken on NPAs.
It is worth noting that the decision of loan waiver is taken by the government while the decision to write off the loan rests with the bank. Banks keep their balance sheets clean by writing off NPAs or bad loans. Banks however keep trying to recover this amount.
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