Banks in India have written off loans worth Rs 9.75 lakh crore over the past 11 financial years, the government informed Parliament on Monday, adding that the move does not amount to a waiver of borrower liabilities.
In a written reply to the Lok Sabha, Union Minister of State for Finance Pankaj Chaudhary said banks write off non-performing assets (NPAs) in accordance with guidelines issued by the Reserve Bank of India.
“Banks write off NPAs, including those in respect of which full provisioning has been made on completion of four years, as per RBI guidelines and policies approved by banks’ boards. Such a write-off does not result in waiver of liabilities of borrowers,” the minister said.
He stressed that borrowers remain liable for repayment even after the write-off and banks continue to pursue recovery through various legal and institutional mechanisms.
According to the data shared in Parliament, the volume of write-offs increased sharply during the late 2010s before declining in recent years.
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Banks wrote off Rs 31,723 crore in FY15, which increased to Rs 40,416 crore in FY16 and Rs 68,308 crore in FY17. The figure rose further to Rs 99,132 crore in FY18, before crossing the Rs 1 lakh crore mark in FY19.
The highest write-off was recorded in FY20 at Rs 1.59 lakh crore, after which the amount gradually declined. In FY25, banks wrote off Rs 47,568 crore, indicating a downward trend compared to the peak years.
The surge in write-offs during earlier years was linked to a large clean-up exercise of stressed assets following stricter recognition norms introduced by the RBI, which required banks to identify and provide for bad loans more aggressively.
Despite the write-offs, banks continue recovery efforts through mechanisms such as proceedings under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, cases before the National Company Law Tribunal, and debt recovery tribunals.
Officials said recoveries from written-off accounts remain an ongoing process, with banks attempting to recover dues through asset sales, insolvency proceedings and settlements.
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