Amid media reports that public sector banks wrote-off loans worth over seven times the recovery amount in the last four years, Finance Minister Arun Jaitley on Monday said the write-offs do not lead to any loan waiver and that the banks continue the recovery process “rigorously.”

“Technical write-offs are resorted by banks as per Reserve Bank of India guidelines. However, this does not lead to any loan waiver. Recovery of loans continues rigorously by banks,” he wrote in a Facebook post.

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A report by The Indian Express on Monday, citing Reserve Bank of India data, said that between April 2014 and April 2018, the country’s 21 state-owned banks wrote off Rs 3,16,500 crore of loans even as they recovered Rs 44,900 crore.

Jaitley said that as per RBI guidelines and policy approved by bank boards, non-performing loans, including those in respect of which full provisioning has been made on completion of four years, are removed from the balance-sheet of the bank by way of write-off.

“Writing-off of non-performing assets is a regular exercise conducted by banks to clean up their balance sheet, and achieving taxation efficiency. Writing off of loans is done, inter-alia, for tax benefit and capital optimisation.

“Borrowers of such written off loans continue to be liable for repayment. Recovery of dues takes place on ongoing basis under legal mechanisms, which include, inter-alia, the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act (SARFAESI Act) and Debts Recovery Tribunals (DRTs),” he said.

The Minister added that the public sector banks were making concerted efforts in recovery of NPAs and had already recovered an amount of Rs 36,551 crore during the first quarter of the current fiscal against the total recoveries of Rs 74,562 crore in FY18.

“The cash recovery target for PSBs for FY19 is Rs 1,81,034 crore. NPAs have peaked and declined by Rs 21,000 crore during quarter ending June over March,” he said.

Blaming the erstwhile UPA dispensation, Jaitley said his government inherited the problem of large-scale NPAs in the banking sector which was a result of aggressive lending from 2008 to 2014 which led to total loan outstanding of PSBs from Rs 18 lakh crore till March 2008 to about Rs 52 lakh crore till March 2014.