Since April 1, 2014, Indian banks have written off loans worth Rs 16,61,310 crore, according to data from the RBI.
Indian Banks Recovered 16% Of Money
In response to a Right to Information (RTI) query by Praful P. Sarda, a civil rights activist, Indian banks have written off loans worth Rs 16,61,310 crore since April 1, 2014 as per the RBI data.
This said data extends to September 30, 2024, indicates that only Rs 2,69,795 crore of this amount has been recovered.
It appears that the RTI response breaks down the write-offs by bank category.
In this, public sector banks led with write-offs of Rs 12,08,621 crore.
This is followed by private sector banks at Rs 4,46,669 crore and urban cooperative banks at Rs 6,020 crore.
It is noteworthy here that recovery rates remained low across all the sectors.
In the case of the Public sector banks, they have recovered Rs 2,16,547 crore.
Similarly the private sector banks recovered Rs 53,248 crore.
It seems that recovery data for urban cooperative banks was unavailable as noted by the RBI.
So far, Rs 13,91,515 crore are still unrecovered which makes the overall recovery rate stand at roughly 16%.
SBI Reported Highest Write Offs
The bank write-offs reached Rs 1.7 lakh crore in the financial year 2023-24 (FY24) – notably the lowest in five years after peaking at Rs 2.34 lakh crore in FY20 as per the data disclosed by Union minister of state for finance Pankaj Chaudhary in response to a question in the Lok Sabha in November 2024.
Among the public sector banks, Punjab National Bank, the Union Bank of India and the State Bank of India reported the highest write-offs.
At the same time, HDFC Bank, Axis Bank and ICICI Bank led among private sector banks.
It is noteworthy here that the overall write-offs decreased in FY24.
In general, more than 20% of banks reported higher write-offs than the previous year.
Most of the write-offs occur for technical, prudential or collection-related reasons, RBI explained.
Besides this the banks maintain the right to recover loans even after writing them off.
It appears that the process serves primarily as an accounting practice for balance sheet-management and tax efficiency.
This does not mean that the write-off releases borrowers from their repayment obligations.
Prior to this, a different RTI response from August 2024 revealed that the banks have recovered just 18.7% of written-off loans in the past five years.
In addition to this, RBI’s September 2024 figures remain provisional.
Please note here that this response excluded data from state cooperative banks and district central cooperative banks, as the RBI does not collect this information.
Besides this, all the provided data comes from banks’ off-site returns.
