Banks write off Rs 9.75 lakh crore of loans over 11 years
→Loan-recovery teams must pursue collections on written-off accounts
Change
Banks have written off loans totalling Rs 9.75 lakh crore across the last 11 financial years, with write-offs peaking at Rs 1.59 lakh crore in FY20 and falling to Rs 47,568 crore in FY25.
Why it matters
Write-off does not waive borrower liability; banks must treat written-off accounts as enforceable and continue recovery actions. Banks must apply RBI provisioning timelines and board-approved write-off policies, including the four-year provisioning observation, before recording write-offs.
Implications
- — Loan-recovery teams at banks must immediately pursue collection and legal recovery on accounts written off — failing to act leaves the bank with unrecovered credit exposures.
- — Compliance and risk teams at banks must immediately certify that each write-off meets RBI provisioning timelines and the bank's board-approved write-off policy — uncertified write-offs expose the bank to regulatory non-compliance.
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Source
View on Economic Times