PSU banks write off INR 6.15 lakh cr over 5.5 years

Public sector banks have written off loans worth `6.15 lakh crore in the last five and a half years, Parliament was informed on Monday.  “As per Reserve Bank of India (RBI) data, PSBs have written off an aggregate loan amount of `6,15,647 crore, during the last five financial years and the current financial year till September 30, 2025 (provisional data),” Minister of State for Finance Pankaj Chaudhary said in a written reply in the Lok Sabha.

There has been no capital infusion in Public Sector Banks (PSBs) by the Government since FY2022-23, he said, adding, PSBs have significantly improved their financial performance, turning profitable and strengthening their capital position.  PSBs now rely on market sources and internal accruals to meet their capital requirements and they have raised `1.79 lakh crore capital from the market through equity and bonds since April 1, 2022 till September 30, 2025, he said.

He further said, banks write off NPAs, including those in respect of which full provisioning has been made on completion of four years, as per RBI guidelines and policy approved by the banks’ board. Such a write-off does not result in waiver of liabilities of borrowers to repay, he said.  Further, he said, recovery in written-off loans is an ongoing process and banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanism available to them, such as filing of a suit in civil courts or in Debts Recovery Tribunals (DRT), action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, filing of cases in the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 etc.

As provisioning for bad loans has already been done and the write-off process does not entail any actual cash outflow, the bank’s liquidity position remains intact, he said. Moreover, banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance sheet, avail tax benefit, optimise capital base, enhance lending capacity and boost investor sentiments, he added. Replying to another question, Chaudhary said, banks and financial Institutions have traditionally been the primary source of export finance in India.

The total export credit disbursed by Public Sector Banks, SIDBI and Exim Bank in the last five years (FY 20-21 to FY 24-25) stood at `21.71 lakh crore, he said. In another reply, Chaudhary said, 5,83,291 fraud cases were registered in the last four and a half years till September 2025, amounting to `3,588.22 crore. Of this, he said, `238.83 crore have been recovered. With increasing digital payment transactions in the country, the incidence of cyber frauds including digital payment frauds, has also gone up in the last few years, he said.