Government Reports: Banks Write-Off ₹9.90 Lakh Crore in Loans Over Last 5 Years

Indian Banks Write Off Loans Worth ₹9.90 Lakh Crores in the Last Five Financial Years

Indian banks have written off loans amounting to ₹9.90 lakh crores in the last five financial years, as informed to the Parliament on Tuesday. Minister of State for Finance, Pankaj Chaudhary, in a written reply to a question in the Rajya Sabha, stated that during the financial year 2023-24, banks wrote off loans worth ₹1.70 lakh crores, while the previous year, this amount was ₹2.08 lakh crores.

In the financial year 2019-20, the highest loan write-off of ₹2.34 lakh crores occurred, which decreased to ₹2.02 lakh crores the following year. In the financial year 2021-22, ₹1.74 lakh crores worth of loans were written off.

Write-Off Does Not Mean Loan Waiver; Recovery is Ongoing

In response to a question posed by Congress MP Randeep Singh Surjewala, Pankaj Chaudhary clarified that according to RBI guidelines, and the policy approved by bank boards, loans classified as Non-Performing Assets (NPAs) are fully provisioned and removed from the bank’s balance sheet after four years, thus being written off. He stated that banks write off loans to clean up their balance sheets. However, writing off a loan does not mean that the loan is waived. He emphasized that loan write-offs do not benefit the borrowers, and the process of loan recovery continues from those who have taken the loans.