PSBs Wrote-Off Rs 6.15 Lakh Crore in Loans in Five-and-a-Half Years: Govt Tells Lok Sabha
The Wire Staff
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New Delhi: The parliament was informed on Monday (December 8) that public sector banks (PSBs) have written off an aggregate loan amount of Rs 6.15 lakh crore in the last five and a half financial years, till September 30, 2025.
In a written reply to a question on bad loans in the Lok Sabha amid the ongoing winter session, minister of state for finance Pankaj Chaudhary stated, “As per Reserve Bank of India (RBI) data, PSBs have written-off an aggregate loan amount of Rs 6,15,647 crore, during the last five financial years and the current financial year till 30.9.2025 (provisional data).”
Further, he also said that PSBs raised a total of Rs 1.79 lakh crore capital from market through equity and bonds between April 2022 and September 2025.
“There has been no capital infusion in Public Sector Banks (PSBs) by the Government since FY 2022-23. PSBs have significantly improved their financial performance, turning profitable and strengthening their capital position. PSBs now rely on market sources and internal accruals to meet their capital requirements. PSBs have raised Rs 1.79 lakh crore capital from market through equity and bonds since 1.4.2022 till 30.9.2025,” he said.
Earlier this year, the RBI issued draft guidelines on non-performing assets (NPAs), titled ‘Securitisation of Stressed Assets’. The guidelines proposed that banks bundle stressed loans into marketable securities and sell them to investors. This was aimed to ease India's bad loan crisis by easing balance sheet pressure and unlock market-driven solutions for bad loan recovery, complementing existing mechanisms like ARCs, IBC and NCLT.
Chaudhary added that the process followed RBI guidelines for banks along with the policy of the banks’ boards on writing off NPAs, including, inter-alia, those in respect of which full provisioning has been made on completion of four years. “Such write-off does not result in waiver of liabilities of borrowers to repay,” he noted.
He also said that recovery in written-off loans is an ongoing process and banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanism available to them, such as filing of a suit in civil courts or in Debts Recovery Tribunals (DRT), action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, filing of cases in the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016, etc.
As provisioning for bad loans has already been done and the write-off process does not entail any actual cash outflow, the bank's liquidity position remains intact.
Moreover, banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit, optimise capital base, enhance lending capacity and boost investor sentiments, he informed the parliament.
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