PSBs Wrote Off More than Rs 12-Lakh Crore in Loans in Last Decade
New Delhi: Public sector banks (PSBs) in India have written off loans amounting to more than Rs 12 lakh crore between the financial years 2015-16 and 2024-25, the finance ministry informed the Rajya Sabha on July 22.
In a written reply, Minister of State for Finance Pankaj Chaudhary presented data revealing that PSBs wrote off an aggregate loan amount of Rs 12,08,828 crore. The data showed that write-offs in the last five fiscal years alone (FY21 to FY25) exceeded Rs 5.82 lakh crore.
The ministry clarified that a "write-off" is a technical accounting procedure and does not constitute a waiver of the borrower's debt. "Such write-off does not result in a waiver of liabilities for borrowers and, therefore, it does not benefit the borrower," Chaudhary stated. "The borrowers continue to be liable for repayment, and banks continue to pursue recovery actions initiated in these accounts."
This practice aligns with Reserve Bank of India (RBI) guidelines, where non-performing assets (NPAs) for which full provisioning has been made are typically written off the balance sheet after four years.
The minister's reply also shed light on wilful defaulters. As of March 31, 2025, a total of 1,629 unique borrowers with an aggregate outstanding loan of over Rs 1.62 lakh crore were classified as wilful defaulters. In response, banks are pursuing recovery through mechanisms like the SARFAESI Act and the Insolvency and Bankruptcy Code (IBC). Additionally, enforcement actions have led to the confiscation of assets worth over Rs 15,000 crore under the Prevention of Money Laundering Act (PMLA) to date.
While data indicated a decline in write-offs for 10 of the 12 PSBs over the last five years, State Bank of India and Canara Bank experienced an increase, particularly during FY25.
In response to a separate question on employment, the Ministry noted that PSBs had recruited nearly 1.5 lakh employees over the last five years, with recruitment for another 48,570 positions currently underway.
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