₹12.3 lakh crore: Indian banks' loan write-off in past 10 years
Indian commercial banks wrote off ₹12.3 lakh crore in loans between the 2014-15 and 2023-24 financial years, according to government data presented in Parliament. Public sector banks accounted for ₹6.5 lakh crore of these write-offs in the last five years (FY20-24), a ToI report said on December 16.
Write-offs peaked at ₹2.4 lakh crore in FY19 following an asset quality review. They dropped to ₹1.7 lakh crore in FY24, representing 1% of the total outstanding bank credit. Public sector banks hold a 51% share of new loans, down from 54% in FY23.
As of September 30, 2024, gross non-performing assets (NPAs) for public sector banks were ₹3,16,331 crore (3.01% of outstanding loans), and ₹1,34,339 crore (1.86% of outstanding loans) for private sector banks. State Bank of India wrote off ₹2 lakh crore during the ten-year period, while Punjab National Bank wrote off ₹94,702 crore. Public sector banks wrote off ₹42,000 crore in the first half of the current fiscal year.
Minister of State for Finance Pankaj Chaudhary explained the write-off process: “Banks write-off NPAs in respect of which full provisioning has been made on completion of four years, according to RBI guidelines and policy approved by banks' boards. Such write-off does not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower and banks continue to pursue recovery actions initiated in these accounts."
Recovery methods include legal action, debt recovery tribunals, and negotiated settlements. Despite these write-offs,
