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Banks have written off massive bad loans or non-performing assets (NPAs) worth Rs 16.35 lakh crore in the last 10 financial years, the Union government disclosed on Monday. This information was presented in the Lok Sabha by finance minister (FM) Nirmala Sitharaman in response to a question raised by member of Parliament Amra Ram.
The highest amount of Rs 2.36 lakh crore was written off during financial year 2018-19 while Rs 58,786 crore were written off in 2014-15, the lowest in the last 10 years. During 2023-24, banks wrote off bad loans of Rs 1.70 lakh crore, lower than Rs 2.16 lakh crore done in the previous financial year.
The data presented in the House revealed that the bulk of these write-offs pertained to large industries and services, which alone accounted for about Rs 9.26 lakh crore of the total NPAs written off during this period. The move to write off these NPAs follows the guidelines issued by the Reserve Bank of India (RBI), which mandate the write-off of bad loans that have undergone full provisioning after four years.
Sitharaman clarified that writing off bad loans does not mean waiving the borrower's liabilities as recovery efforts are ongoing. Banks continue to pursue the recovery of dues through legal mechanisms such as civil courts, debt recovery tribunals (DRTs), and the national company law tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), the finance minister said.
Sitharaman also said that RBI does not maintain a company-wise list of written-off loans, and the disclosure of borrower-specific information is restricted under Section 45E of the RBI Act, 1934. As of December 31, 2024, scheduled commercial banks had 29 unique borrower companies classified as NPAs, each with outstanding loans of Rs 1,000 crore or more, totaling Rs 61,027 crore in aggregate.
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