PSU Banks Wrote Off Over ₹5.82 Lakh Crore in Loans in the Last 5 Years: MoS Finance

As per news reports, Public Sector Banks (PSBs) have written off bad loans worth ₹5.82 lakh crore over the last 5 financial years, the government told Parliament on August 12, 2025. In 2024-25, write-offs stood at ₹91,260 crore, compared to ₹1.15 lakh crore in the previous year.

The highest write-off during this period was in 2020-21 at ₹1.33 lakh crore. This was followed by ₹1.16 lakh crore in 2021-22 and ₹1.27 lakh crore in 2022-23.

Recovery from Written-Off Loans

Over the same 5-year period, PSBs recovered about ₹1.65 lakh crore from these written-off accounts. This recovery represents around 28% of the total amount written off during the period.

As per news reports, the Minister of State for Finance, Pankaj Chaudhary, said, “Banks write off NPAs, including those in respect of which full provisioning has been made on completion of 4 years, as per the Reserve Bank of India (RBI) guidelines and policy approved by banks’ Boards.”

Borrower Liability and Recovery Channels

Mr. Chaudhary clarified that “Such write-off does not result in waiver of liabilities of borrowers and therefore, it does not benefit the borrower. The borrowers continue to be liable for repayment, and banks continue to pursue recovery actions initiated in these accounts.”

Recovery is carried out through measures including civil court cases, proceedings in Debt Recovery Tribunals, and cases filed with the National Company Law Tribunal under the Insolvency and Bankruptcy Code.

Read more: Bank of Baroda, Canara Bank Shed ₹54,000 Crore Loans to Protect Margins!

Other Recovery and Credit Data

In a separate response, the minister said that in 2024-25, Scheduled Commercial Banks recovered ₹32,466 crore under the SARFAESI Act in 2,15,709 cases, as per provisional RBI data.

He also informed that over the last 5 years, more than ₹21.68 lakh crore has been disbursed under the Pradhan Mantri Mudra Yojana (PMMY) across the country.

Conclusion

PSBs have written off over ₹5.82 lakh crore in bad loans in the past 5 years, with ₹1.65 lakh crore recovered so far. Recovery processes remain ongoing through various legal and institutional mechanisms.

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