India’s banks write off Rs.16.35 lakh crore in bad loans over the last 10 years. Govt avoids naming Corporates behind Rs.9.26 lakh crore write-offs

Govt withholds names of defaulters with bad loans over Rs.5,000 cr

India’s banks have written off non-performing assets (NPAs) or bad loans worth about Rs.16.35 lakh crore in the last 10 financial years, Parliament was informed on Monday. Out of this huge figure, big industries’ bad loans written off amount to Rs.9.26 lakh cores. However, the government has evaded from answering the questions on naming the Corporates whose loans turned as bad loans and those who got loans above Rs.5,000 crores which turned as bad loans.

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. During 2023-24, banks wrote off bad loans of Rs.1,70,270 crore, lower than Rs.2,16,324 crore done in the previous financial year.

Banks write off non-performing assets (NPAs), including those in respect of which full provisioning has been made on completion of four years, as per the Reserve Bank of India (RBI) guidelines and policy approved by banks’ boards, Finance Minister Nirmala Sitharaman said in a reply in the Lok Sabha.

Such write-offs do not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower, she said.

Banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanisms available to them, such as filing 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, said Finance Minister in the detailed reply.

As per RBI data, as of December 31, 2024, scheduled commercial banks had 29 unique borrower companies, which have been classified as NPAs and each of them has outstanding of Rs.1,000 crore and above, she said, adding aggregate outstanding in these accounts were Rs.61,027 crore. With regard to 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.

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 debts recovery tribunals, and, action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, said Finance Minister to the questions raised by CPI(M) MP Amra Ram.

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