PSBs Write Off ₹3.57 Lakh Crore Bad Loans in 5 Years; 15,930 Wilful Defaulters Owe ₹2.85 Lakh Crore: Govt

Moneylife Digital Team 03 August 2026

Economy & Nation

Public sector banks (PSBs) have written off bad loans worth more than ₹3.57 lakh crore during the past five financial years, while recovering about ₹1.65 lakh crore from written-off accounts over the same period, the Union government informed the Lok Sabha on Monday.

Replying to an unstarred question raised by Radhakrishna, member of Parliament (MP), Union minister of state for finance Pankaj Chaudhary said PSBs wrote off non-performing assets (NPAs) worth ₹357,185 crore between FY21-22 and FY25-26 (provisional). During the same period, these state-run banks recovered ₹164,710 crore from written-off accounts.

The annual write-offs stood at ₹115,537 crore in FY21-22, ₹127,237 crore in FY22-23, ₹114,622 crore in FY23-24, ₹91,261 crore in FY24-25 and ₹70,528 crore in FY25-26 (provisional). The data indicate that annual write-offs have declined steadily after peaking in FY22-23.

Recoveries from written-off accounts amounted to ₹24,739 crore in FY21-22, ₹35,377 crore in FY22-23, ₹37,369 crore in FY23-24, ₹42,563 crore in FY24-25 and ₹24,662 crore in FY25-26 (provisional). Overall, recoveries during the five-year period amounted to about 46% of the value of loans written off.

The government clarified that recoveries made during a financial year may relate to loans written off during that year as well as previous years.

15,930 Wilful Defaulters Owe ₹2.85 Lakh Crore

The government also informed the Lower House that, as of 30 June 2026, PSBs had 15,930 wilful defaulters with outstanding dues of ₹285,015 crore (about ₹2.85 lakh crore).

Of these, 7,190 cases involving defaults amounting to ₹192,187 crore have been referred for criminal action, the minister said.

SBI Tops Write-offs and Recoveries

Among individual lenders, State Bank of India (SBI) recorded the highest write-offs as well as the highest recoveries. During FY25-26, SBI wrote off ₹17,803 crore and recovered ₹10,054 crore. Canara Bank wrote off ₹13,541 crore, followed by Punjab National Bank (₹7,696 crore), Union Bank of India (₹6,643 crore), Indian Bank (₹6,562 crore) and Bank of Baroda (₹6,330 crore).

According to Mr Chaudhary, some banks reported recovery amounts exceeding their write-offs during FY25-26 because recoveries included loans written off in earlier years. Indian Overseas Bank recorded a recovery ratio of 182.89%, followed by Central Bank of India (132.11%), Bank of Maharashtra (117.70%), Punjab and Sind Bank (111.87%) and UCO Bank (103.83%).

Industry Accounts for Largest Share

Sector-wise data showed that industry accounted for the largest share of write-offs during the five-year period, at ₹195,315 crore. The services sector followed with write-offs of ₹152,233 crore, while micro, small and medium enterprises (MSMEs) accounted for ₹99,016 crore. Agriculture and allied activities saw write-offs of ₹75,591 crore, while retail loans accounted for ₹34,940 crore.

Although industry continued to account for the largest cumulative write-offs, annual write-offs in the sector declined significantly from ₹54,771 crore in FY22-23 to ₹17,266 crore in FY25-26.

Clarifying the nature of loan write-offs, the finance ministry said that, under the Reserve Bank of India's (RBI's) Resolution of Stressed Assets Directions, 2025, a write-off is an accounting procedure undertaken to clean up banks' balance sheets. It does not amount to a waiver of loans, and borrowers remain legally liable to repay their dues.

Banks continue to pursue recovery through various legal and institutional mechanisms even after loans are written off, the government said.

Comments

User

deepak.narain

5 days ago

This is only half of the needed information. The report should also furnish the names of borrowers, wilful borrowers and repeat borrowers.

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