Indian banks write off Rs 16.35 lakh crore in bad loans over last 10 years
Indian Banks wrote off Rs 16.35 lakh crore NPAs over 10 years, with Rs 2.36 lakh crore in 2018-19 being the highest and Rs 58,786 crore in 2014-15 the lowest.
As per the government data, Indian Banks have written off non-performing assets (NPAs) or bad loans worth about Rs 16.35 lakh crore in the last 10 financial years. Accordingly, the highest amount of Rs 2,36,265 crore was written off during financial year 2018-19 while NPAs worth Rs 58,786 crore were written off in 2014-15, the lowest in the last 10 years. Banks wiped off bad loans of Rs 1,70,270 crore during 2023–24, less than Rs 2,16,324 crore in the past financial year.
In accordance with the Reserve Bank of India (RBI) policies and approved by banks' boards, banks write off non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, Finance Minister Nirmala Sitharaman said in a reply in the Lok Sabha. Such write-offs do not benefit the borrower since they do not cause a waiver of liabilities of borrowers, she remarked.
The Minister has informed that Banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanisms available to them, such as filing of a suit in civil courts or in debt recovery Tribunals, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, filing of cases in the National Company Law Tribunal under the Insolvency and Bankruptcy Code, etc.
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As of Dec 31, 2024, the RBI data shows scheduled commercial banks had 29 unique borrower companies, which have been classified as NPAs and each of them have outstanding of Rs 1,000 crore and above, she said, adding aggregate outstanding in these accounts were Rs 61,027 crore.
Concerning recovery of overdue amounts from borrowers, banks make calls and issue emails/letters to borrowers regarding payment of the overdue amounts, and depending on the default amount, banks may also approach the National Company Law Tribunal for initiation of corporate insolvency resolution process in case of corporate borrowers.
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Further, if a loan account is classified as NPA, banks initiate recovery actions, as per their Board-approved policies, which include filing of a suit in civil courts or in debt recovery tribunals, and, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, she added.
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