REGULATORY · COMPETITIVE · INDIA
Banks write off Rs 9.75 lakh crore
Change
Banks have written off loans totaling Rs 9.75 lakh crore over the last 11 financial years through FY25.
Why it matters
Write-offs by banks cumulatively total Rs 9.75 lakh crore across the 11 financial years through FY25. Annual write-off figures include Rs 31,723 crore (FY15), Rs 40,416 crore (FY16), Rs 68,308 crore (FY17), Rs 99,132 crore (FY18), over Rs 1 lakh crore in 2018‑19, a peak of Rs 1.59 lakh crore in FY20, and Rs 47,568 crore in FY25. Write-offs are recorded for non-performing assets after full provisioning and after four years in line with RBI guidelines and banks' board-approved policies. Banks continue to pursue recovery processes on written-off accounts using the recovery mechanisms available to them and record recoveries as ongoing.
Implications
- · Borrowers on written-off accounts remain legally liable for repayment and can be subject to recovery actions.
- · Banks retain operational authority and ongoing obligations to pursue recoveries on written-off loans through available legal and recovery channels.
- · Timing of write-offs is constrained by RBI guidance and board-approved policies requiring full provisioning and a four-year period before write-off, structuring banks' provisioning and write-off schedules.
Who is affected
- · Commercial banks
- · Borrowers with written-off loan accounts
- · Bank recovery and risk units
- · Reserve Bank of India
Source
Topics
Law & Public Safety Compliance Finance & Banking Banking Regulation Financial Services