A right to information (RTI) reply from Central Bank of India has laid bare a sharp and troubling divide in how the public sector banks (PSBs) treat their small borrowers versus their biggest loan defaulters — even as the lender continues to refuse to name a single one of the large defaulters whose written-off dues run into thousands of crores of rupees. The RTI reply is issued in response to an application filed by Pune-based RTI activist Vivek Velankar, president of Sajag Nagrik Manch.
The Numbers: A Tale of Two Recovery Rates
According to the Bank's own data, over the 10 financial years (FYs) from FY16-17 to FY25-26, Central Bank of India wrote off loans worth ₹26,701.55 crore belonging to large defaulters — those owing more than ₹100 crore each. Of this enormous sum, the Bank has managed to recover only ₹3,874.41 crore, a recovery rate of roughly 14.5% — meaning more than 85% of the written-off amount from big borrowers remains unrecovered.
The year-wise break-up shows the scale of the write-offs: ₹7,002.58 crore was written off in FY18-19 alone, of which only ₹761.01 crore has been recovered. In FY24-25, ₹2,255.61 crore was written off against big defaulters, but recovery stood at a mere ₹53.42 crore. For FY21-22, the Bank recorded neither write-offs nor recoveries under this category.
Contrast this with how the Bank has dealt with small borrowers — those owing less than ₹1 crore. Over the same period, Central Bank of India wrote off ₹6,774.23 crore in small loans, but recovered as much as ₹5,004.28 crore, a recovery rate of nearly 74%! Notably, the bank reported no write-offs or recoveries for small borrowers between FY16-17 and FY21-22, with virtually all activity concentrated in FY22-23 and FY23-24, when ₹1,856.87 crore and ₹3,845.54 crore were written off, respectively, and swiftly followed by recoveries of ₹1,395.11 crore and ₹3,481.32 crore in those same years.
The disparity is stark: the recovery rate for big defaulters is roughly one-fifth that of small borrowers, even though the sums involved with big defaulters are far larger.
Names of Big Defaulters Withheld — Again
Mr Velankar had specifically asked Central Bank of India for the names of loan takers whose dues above ₹100 crore were written off in each financial year since FY16-17, along with the write-off amount for each. The Bank refused, stating that 'the information sought is related to a third party, hence cannot be provided'.
The Bank gave the identical response to Mr Velankar's query seeking a list of borrowers whose loans were settled through the national company law tribunal (NCLT) or similar forums by the bank accepting a 'haircut' — a term for the loss a lender agrees to absorb when settling a bad loan for less than what is owed. The Bank did not disclose either the names or the individual haircut amounts for these settlements.
When asked for the total amount of haircut taken by the Bank to settle loans each financial year between FY17-18 and FY25-26, as against the amount recovered, the lender's response is even more dismissive: "Query is not clear, hence cannot be replied."
"Bank's Concern for Big Defaulters' Reputation Is Outrageous"
Reacting to the reply, Mr Velankar did not mince words. He pointed out that while the Bank's data shows only 15% recovery from big defaulters against 74% from small ones, Central Bank of India still refuses to name the large borrowers — even though these were cases where the PSB likely had to forgo huge sums through NCLT settlements. He called it infuriating that the Bank appears more concerned with protecting the reputation of big defaulters than with public accountability.
He drew a pointed contrast: banks are quick to publicly name and shame small defaulters in newspapers and move to sell off their homes to recover dues, yet they take a soft, accommodating approach with big borrowers — writing off huge sums and letting them go unnamed.
He held Reserve Bank of India (RBI) and the Union ministry of finance (MoF) equally responsible for staying silent spectators to this pattern, and said it was unfortunate that no action is taken against the Bank's board of directors — who he said were responsible both for the reckless sanctioning of these large loans in the first place, and for the subsequent failure to recover them or the haircuts taken to settle them.
The RTI reply adds to a long-running debate in India over the transparency — or lack thereof — around wilful defaulters and large corporate loan write-offs at PSBs.. Banks routinely cite 'third-party information' exemptions under the RTI Act to withhold defaulter names, even as small borrowers face public disclosure, recovery notices and asset auctions with far less resistance.
With ₹26,701 crore written off for big defaulters against just ₹3,874 crore recovered — and the identities of those defaulters still undisclosed — questions about accountability, transparency and equal treatment under India's banking recovery framework remain firmly unanswered.
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