Union Finance Minister Arun Jaitley on Monday said writing off of bad loans is a regular exercise that banks conduct to clean up their balance sheet. His comments came after a report in The Indian Express claimed, citing data from the Reserve Bank of India, that nearly 21 public sector banks had written-off Rs 3,16,500 crore of loans – over seven times the recovery amount – between April 2014 and April 2018.

Jaitley said the Bharatiya Janata Party-led Union government inherited the problem of large-scale non-performing assets in the banking sector in 2014. “The total loan outstanding of PSBs [public sector banks], which was about Rs 18 lakh crore till March 2008, increased to about Rs 52 lakh crore till March 2014,” he wrote.

He clarified that banks resort to technical write-offs as per the RBI guidelines. However, this does not lead to any loan waiver, he added. According to the central bank’s guidelines, non-performing loans are removed from the balance-sheet of the bank by way of write-off on completion of four years.

“Writing off of loans is done, inter-alia, for tax benefit and capital optimisation,” Jaitley said in a Facebook post. “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.”

Jaitley said Asset Quality Review initiated by the RBI in 2015 revealed that non-performing assets of state-run banks increased from Rs 2.26 lakh crore in March 2014 to Rs 8.96 lakh crore in March 2018. Aggressive lending and laxity in credit risk appraisal and loan monitoring led to the surge, he said.

Earlier on Monday, Congress President Rahul Gandhi took a swipe at the Centre, while sharing The Indian Express report, alleging that “crony capitalists” got their Rs 3.16 lakh crore debt written off using public money.