Home / Business and Economy / India Banks Wipe Rs 6.15 Trillion in Bad Loans
India Banks Wipe Rs 6.15 Trillion in Bad Loans
8 Dec
Summary
- Public sector banks wrote off ₹6.15 trillion in loans over five and a half years.
- Write-offs are per RBI norms; borrowers remain liable for repayment.
- Banks raised ₹1.79 trillion from markets, no capital infused since FY22-23.
Over the past five-and-a-half years, Indian public sector banks have removed ₹6.15 trillion from their books through loan write-offs. This provisional data, shared by the Minister of State for Finance, covers the period from FY2019-20 up to September 2025. These actions adhere to Reserve Bank of India guidelines, which permit the removal of non-performing assets after full provisioning.
Crucially, these write-offs do not signify a waiver of debt. Borrowers remain legally obligated to repay these amounts, with banks actively pursuing recoveries through various legal channels. The government has not injected capital into these banks since FY2022-23, as they have demonstrated a return to profitability and strengthened their financial standing. Instead, PSBs have successfully raised ₹1.79 trillion from capital markets.
Write-offs serve to clean up bank balance sheets, optimize capital, and enhance investor confidence, without any immediate cash outflow due to prior provisioning. Separately, PSBs, SIDBI, and Exim Bank collectively disbursed ₹21.71 trillion in export credit over the last five years. The period also saw 583,291 fraud cases reported, totaling ₹3,588.22 crore, with ₹238.83 crore recovered.
