Corruption
Banks Write Off a Staggering Rs 17 Lakh Crore in Bad Loans Over a Decade
In a shocking revelation, banks have written off a colossal Rs 16.35 lakh crore in non-performing assets (NPAs) over the past ten financial years, the Union government disclosed in Parliament. Finance Minister Nirmala Sitharaman presented this data in response to a question from MP Amra Ram.
The financial year 2018-19 witnessed the highest bad loan write-off at Rs 2.36 lakh crore, while 2014-15 saw the lowest at Rs 58,786 crore. In 2023-24, banks wrote off Rs 1.70 lakh crore in NPAs, lower than the Rs 2.16 lakh crore written off the previous year.
According to the data, large industries and service sectors accounted for a significant chunk of these write-offs, totaling approximately Rs 9.26 lakh crore. The Reserve Bank of India (RBI) mandates that NPAs undergo full provisioning before being written off, typically after four years.
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However, Sitharaman clarified that writing off bad loans does not equate to waving off liabilities. Banks continue efforts to recover dues through legal avenues such as civil courts, debt recovery tribunals (DRTs), and the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC).
Furthermore, the finance minister noted that RBI does not disclose company-specific loan write-offs, as borrower details are protected under Section 45E of the RBI Act, 1934. As of December 31, 2024, scheduled commercial banks had 29 major corporate borrowers classified as NPAs, each with outstanding loans exceeding Rs 1,000 crore, collectively amounting to Rs 61,027 crore.
The revelations raise concerns about the financial sector’s health and highlight the urgent need for stronger loan recovery mechanisms to prevent such massive losses in the future.