Public sector banks (PSBs) in India have written off non-performing assets (NPAs) worth over ₹4.48 lakh crore in the last four financial years, Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha on August 7. The scale of these write-offs has raised concerns over transparency and accountability in public banking, according to The Tribune.
Top PSBs’ Massive Loan Write-Offs and Government’s Technical Clarification
An NPA is a debt where the borrower has defaulted on interest or principal repayment, putting the loan at risk. Data shows the State Bank of India (SBI) topped the list with ₹80,197 crore written off between FY22 and FY25. It was followed by Union Bank of India (₹68,557 crore), Punjab National Bank (₹65,366 crore), and Bank of Baroda (₹55,279 crore). Canara Bank wrote off ₹47,359 crore, while Indian Bank’s total was ₹29,949 crore in the same period.
The government clarified that loan write-offs are “technical” in nature, carried out as per Reserve Bank of India guidelines after provisioning for four years. It emphasised that a write-off does not mean the borrower’s obligation is waived, and recovery processes remain active. Recovery is pursued through mechanisms such as the Insolvency and Bankruptcy Code (IBC), the SARFAESI Act, Debt Recovery Tribunals, and civil courts. However, the government did not provide details on the actual recovery achieved after these write-offs, leaving questions on effectiveness.
Gross NPAs of PSBs Drop Sharply Despite Large Write-Offs
Earlier in July, the finance minister of state stated in Parliament that gross NPAs of PSBs had fallen significantly—from 9.11% in March 2021 to 2.58% in March 2025—indicating improved asset quality despite the large write-offs. The figures highlight both the ongoing challenges of bad loans and the dependence on write-offs as a banking clean-up tool.
Summary:
Indian PSBs wrote off over ₹4.48 lakh crore NPAs in four years, with SBI leading at ₹80,197 crore. The government says write-offs are technical and recoveries continue, but gave no recovery data. Gross NPAs dropped from 9.11% in 2021 to 2.58% in 2025, reflecting improved asset quality amid challenges.
