Rs16.35 Lakh Crore Bad Loans Written Off by Banks in Past 10 Years: Govt

Moneylife Digital Team 21 March 2025

Personal Finance

In a startling revelation, the Union government disclosed that scheduled commercial banks (SCBs) in the country have written off bad loans (non-performing assets—NPAs) worth a staggering Rs16.35 lakh crore worth of over the past decade. This information was presented in the Lok Sabha by finance minister (FM) Nirmala Sitharaman in response to a question raised by member of Parliament (MP) Amra Ram.

The data presented in the House revealed that the bulk of these write-offs pertained to large industries and services which alone accounted for about Rs9.26 lakh crore of the total NPAs written off during this period. The move to write off these NPAs follows the guidelines issued by the Reserve Bank of India (RBI) which mandate the write-off of bad loans that have undergone full provisioning. after four years.

Year-Wise Breakdown of Write-offs

According to the data tabled in the Parliament, the following amounts were written off by SCBs year-wise:

These figures highlight a consistent pattern of massive write-offs, especially in the industrial and services sectors, over the past 10 years.

While the government clarified that writing off bad loans does not mean waiving the borrower's liabilities, recovery efforts are ongoing. Banks continue to pursue the recovery of dues through legal mechanisms such as civil courts, debt recovery tribunals (DRTs), and the national company law tribunal (NCLT) under the Insolvency and Bankruptcy Code (IBC), the FM says.

Ms Sitharaman also pointed out that RBI does not maintain a company-wise list of written-off loans and the disclosure of borrower-specific information is restricted under Section 45E of the RBI Act, 1934.

As of 31 December 2024, 29 corporate entities had outstanding NPAs exceeding Rs1,000 crore each, with the total amount adding up to Rs61,027 crore.

Opposition leaders have criticised the Union government for the enormous sum of write-offs, calling it a reflection of poor governance and laxity in holding corporate defaulters accountable. Critics argue that while the government claims to be pursuing recovery, the actual realisation of written-off amounts has been minimal.

Experts argue that merely writing off bad loans without effective recovery mechanisms risks encouraging financial indiscipline among borrowers. Strengthening corporate governance and imposing stricter due diligence practices in lending are essential to prevent the recurrence of such colossal NPAs in the future.

As the debate continues, questions remain about the efficacy of the government's recovery strategy and the accountability of large corporate defaulters who continue to evade financial responsibility.

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Comments

User

Rajan Manchanda

4 days ago

IDFC First Bank Ltd gives a loan of Rs 60 Crores to Niraj Kakad constructions Pvt Ltd. The Company has a paid up capital of Rs 3.05 lakhs! The bank does ever greening of the account several times so as not to show the account as NPA. Rs 60 Crores in july 2016 turns to Rs 156 Crores in Feburary 2022 , the bank agrees to an OTS (One time settlement) at Rs 34 Crores with the developer. A complaint to RBI results in the OTS being blocked. The developer does several acts bringing the Bank to their knees which is a matter of record in several high Court proceedings between the bank and the developer. In 2018 the bank issues notice under Sarfaesi but acts on it only in 2022. The Court in April 2024 appoints A Court Commissioner to take over all assets of the developer. Even after a lapse of one year the bank does not hand over /pays fees or even intimate the Court Commissioner about the Order of the Court ! Nine Letters to the CEO of the bank and copies to the Board of directors of the bank remain unacknowledged. 3 flats mortgaged to the Bank in a project Nidhi Towers Juhu where OC is received in August 2024 , the bank does not secure itself by taking possession after making payment as per the Arbitration award which went against the developer Niraj Kakad constructions Pvt. Ltd. (This is just a gist of what is going on in the bank. It's a long story. ) Banks quietly write off loans and put a lid on their misdoings.
Rajan Manchanda

98210 50050
[email protected]

akumarsingh1

4 weeks ago

Great governance, you can say, Modi has achieved the impossible, rewarded the poor businesses with bail outs.

pmbhate

1 month ago

Which means every Indian has 'donated' Rs 660 per year for the last 10 years to a select group of thugs including many unscrupulous bank employees. This is obviously OK with the government.

abhay1955

1 month ago

If banks can write off such a huge amount, what prevents them from providing full cover to their depositors? Why should the depositors suffer for someone else's mis-deeds? FM has clarified that banks have the right to recover these loans. I am happy. Would she please provide data as to how many such loans were partially or fully recovered, atleast after 2014?

faez.haidri

1 month ago

So our government has been able to give Rs 16.35 lakhs to 1 crore people or is it 1 crore to 16 lakh people.

shahmahesh253

1 month ago

Internal controls and internal checks and internal audit especially at public sector banks and co- operative banks india are very very poor and substandard
Ps errors & ommissions are permissible