Indian banks have written off bad loans amounting to Rs 16.35 lakh crore over the past ten financial years, the Union government informed Parliament on Monday (March 17).

The disclosure was made by Finance Minister Nirmala Sitharaman in response to a query raised by CPI(M) MP Amra Ram in the Lok Sabha.

Since the BJP-led government assumed office in 2014, banks have written off significant amounts of non-performing assets (NPAs) each year. In the financial year 2014-15, bad loans worth Rs 58,786 crore were written off, while the highest annual write-off occurred in 2018-19, amounting to Rs 2,36,265 crore. During the financial year 2023-24 alone, banks wrote off Rs 1,70,270 crore in bad loans.

Sitharaman clarified that NPAs are written off by banks in accordance with the guidelines set by the Reserve Bank of India (RBI) and the policies approved by their respective boards.

Year-wise breakup of NPAs written-off provided by the Finance Minister.

As per RBI norms, banks are required to write off NPAs, particularly those for which full provisioning has been completed over a four-year period. However, she emphasized that despite the write-offs, banks continue their efforts to recover dues through various mechanisms available to them.

The finance minister also revealed that as of December 31, 2024, 29 corporate borrowers, each with outstanding dues exceeding Rs 1,000 crore, had been classified as NPAs by scheduled commercial banks. The total outstanding amount in these accounts stood at Rs 61,027 crore.

While loan write-offs are a routine banking practice, they have been a subject of intense scrutiny, particularly in light of the significant amounts involved.

Critics argue that such write-offs disproportionately benefit corporate borrowers, while common citizens and small businesses struggle with stringent loan recovery measures.

The issue continues to be a key point of debate in discussions around the Indian banking sector's stability and accountability.