The Finance Ministry’s data highlights that FY19 saw the highest-ever loan write-offs at ₹2.36 lakh crore, while FY15 recorded the lowest at ₹58,786 crore. In FY24, banks wrote off ₹1.70 lakh crore, a decline from ₹2.16 lakh crore in the previous fiscal.
The Reserve Bank of India (RBI) clarified that these write-offs are in line with regulatory norms, requiring banks to fully provision NPAs after four years. The move is aimed at strengthening financial stability while ensuring recoveries remain a priority.
While this move helps clean up bank balance sheets, it does not absolve defaulters, and efforts to recover these dues remain a key focus.
NPAs written-off over the last 10 years
| Financial Year | Total NPAs Written-Off (₹ crore) | NPAs Written-Off for ‘Large Industries & Services’ (₹ crore) |
|---|---|---|
| 2014-15 | 58,786 | 31,723 |
| 2015-16 | 70,413 | 40,416 |
| 2016-17 | 1,08,373 | 68,308 |
| 2017-18 | 1,61,328 | 99,132 |
| 2018-19 | 2,36,265 | 1,48,753 |
| 2019-20 | 2,34,170 | 1,59,139 |
| 2020-21 | 2,04,272 | 1,27,050 |
| 2021-22 | 1,75,178 | 69,532 |
| 2022-23 | 2,16,324 | 1,14,528 |
| 2023-24 | 1,70,270 | 68,366 |
| Total | 16,35,379 | 9,26,947 |
Source: RBI
“Such write-offs do not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower,” Finance Minister Nirmala Sitharaman stated in response to a Lok Sabha query.
As of December 31, 2024, RBI data shows that 29 large corporate borrowers, each with outstanding dues exceeding ₹1,000 crore, remain classified as NPAs, with a total outstanding amount of ₹61,027 crore. However, borrower-wise details remain undisclosed due to confidentiality clauses under Section 45E of the RBI Act, 1934.
Recovery efforts continue through multiple mechanisms, including legal proceedings in civil courts, Debt Recovery Tribunals, and enforcement actions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
Insolvency proceedings under the National Company Law Tribunal (NCLT) are also being leveraged to recover dues.
Public Sector Banks’ turnaround
Despite large write-offs, Indian banks—particularly Public Sector Banks (PSBs)—have demonstrated a remarkable turnaround.
The RBI’s ‘Report on Trend and Progress of Banking in India 2023-24’ highlighted that banks’ gross NPAs fell to a 13-year low of 2.5% at the end of September 2024, down from 2.7% in March. Net NPAs also declined to 0.57% from 0.62%, reflecting improved provisioning and better asset quality.
Gross NPAs for PSBs have plummeted to 3.12% in September 2024, marking a significant recovery from the 14.58% peak in March 2018.
While the banking sector’s asset quality continues to improve, concerns remain over recoveries from large corporate defaulters. The Finance Ministry reiterated that banks are actively following up on overdue amounts through a combination of legal action and direct negotiations with borrowers.
