New Delhi: Public sector banks (PSBs) have written off non-performing assets (NPAs) worth over Rs 4.48 lakh crore in the last four financial years, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on Wednesday (August 7). 

The revelation has raised serious questions on the functioning of the public banking system, according to a report by The Tribune.

NPA refers to a debt instrument where the borrower has defaulted to make interests or principal repayments, and the loan may be at risk of default.

According to the report, the State Bank of India, the country’s largest public sector bank, leads the list with total write-offs worth Rs 80,197 crore from FY22-25. 

The Union Bank of India is next in line with write-offs amounting to Rs 68,557 crore, followed by Punjab National Bank with Rs 65,366 crore, and Bank of Baroda Rs 55,279 crore. Canara Bank reported R$ 47,359 crore in write-offs during the same period, while Indian Bank wrote off Rs 29,949 crore.

Cumulatively, write-offs from 12 banks amounted to Rs 4.48 lakh crore.

Loan write-offs are "technical" in nature and carried out in accordance with RBI guidelines after provisioning for four years, the government maintains. The ministry clarified that a write-off does not mean waiving the borrower's obligation, the report said.

Recovery actions continue through mechanisms such as the Insolvency and Bankruptcy Code, the SARFAESI Act, Debt Recovery Tribunals and civil courts, it added.

The government, however, did not provide any update on the recoveries made after the write-offs.

Earlier in July, in a written reply to a question in Rajya Sabha, the finance MoS had noted that the government’s gross NPAs reduced from 9.11% to 2.58% from March 2021 to March 2025.

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