New Delhi: Public sector banks wrote off Rs 14,549 crore as loans, while made recovery of bad assets to the tune of Rs 16,464 crore during the January-March quarter of 2012-13, Parliament was informed Friday.
"Banks resort to write off only after exhausting all other possible avenues for recovery or when the asset coverage is not enough," Minister of State for Finance Namo Narain Meena said in a written reply in Lok Sabha.
He further said that banks are required to ahere to RBI guidelines on write offs as well its board approved policy.
"The banks should either make full provision as per the guidelines or write-off such advances and claim such tax benefits as are applicable," Meena said.
In reply to a separate question on long term capital need of the banks, the minsiter said that the government is considering to set up a holding company to meet these requirements.
"To meet the long-term needs of capital of public sector banks (PSBs), the government in consultation with Reserve Bank, is considering formation of holding company.
The matter is under consultation with Department of Legal Affairs and Legislative Department," Meena said.
The public sector banks need capitalisation to meet their enhanced lending, which is increasing every year. This fiscal, the government has made provisions of Rs 14,000 crore for bank recapitalisation.
First Published: Friday, August 30, 2013, 19:30