India’s public sector banks have written-off Rs 10.42 lakh crore loans in nine years between FY2015 and FY2023, as per the Reserve Bank of India’s data shared by the union finance ministry in the Lok Sabha in December last year. Of this, the banks have recovered Rs 1.61 lakh crore.

An RTI reply to transparency activist commodore Lokesh Batra (retired) earlier this month detailed the bank-wise data on reduction in non-performing assets and recovery from written-off accounts for the nine-year period. 

The public sector banks recorded a 59 percent increase in the total amount of loan write-offs over the nine-year period, whereas the recovery amount rose by 85 percent during the same time.  Banks cumulatively recovered 15.5 percent of the loans they wrote-off during this time. 

The write-offs peaked in the fiscal year 2019, which recorded a cumulative loans write-off worth Rs 1,83,202 crore, while the loan recoveries were the highest in FY2023 at Rs 35,378 crore.         

Banks use loan write-offs as a strategy to reduce the burden of NPAs on their books. The RTI document said, “A major portion of this write-offs is due to technical/prudential/advances collection. The banks retain the right to recover from the borrowers in all such cases.”    

Top banks leading loan write-offs, recovery over nine years

The document detailed 27 bank groups, among which the top five banks that wrote-off the highest loan amounts were State Bank of India, Punjab National Bank, Bank of Baroda, Union Bank of India, and Bank of India. These banks cumulatively lost over Rs 6 lakh crore during the nine years, and recovered a total of Rs 1.9 lakh crore during the period.

The State Bank of India wrote-off the highest amount of loans, worth Rs 2,86,144 crore, during the nine months. 

The SBI was followed by the Punjab National Bank, with a loan write-off amount at Rs 1,05,478 crore. The Bank of Baroda recorded the third highest loan write-off amount at Rs 92,174 crore, and the Union Bank of India stood at the fourth spot with write-off worth Rs 78,294 crore. The Bank of India stood at the fifth spot with write-offs worth Rs 62,537 crore.    

The top five banks to recover the most from the written off accounts during the nine years are SBI, PNB, Canara Bank, Union Bank of India, and Bank of Baroda – a cumulative amount of Rs 1.18 lakh crore.       

The SBI recovered Rs 54,481 crore in the nine years period, PNB recovered Rs 23,779 crore from its written off accounts, Canara Bank recovered Rs 15,054 crore, Union Bank of India recovered Rs 13,026, and Bank of Baroda recovered Rs 12,305 crore.  

The SBI’s total recovery made only 19 percent of its total write-off during the nine years, while PNB’s total recovery made 22 percent of its loan write-offs.  

The public sector banks wrote-off a cumulative Rs 49,018 crore in FY2015, the amount was Rs 57,585 crore in FY2016, Rs 81,683 in FY2017, Rs 1,28,229 crore in FY2018, Rs 1,83,202 crore in FY2019, Rs 1,75,877 crore in FY2020, Rs 1,31,894 crore in FY2021, Rs 1,15,536 crore in FY2022, and Rs 1,18,950 crore in FY2023. 

The recovery amount for public sector banks stood at Rs 5,461 crore in the financial year 2015. It was Rs 8,096 crore in FY2016, Rs 8,680 crore in FY2017, Rs 10,456 crore in FY2018, Rs 19,067 crore in FY2019, Rs 24,002 crore in FY2020, Rs 24,781 crore in FY2021, Rs 24,739 in FY2022, and Rs 35,378 in FY2023.       

Loan write-offs and recoveries in FY2023

The SBI had written off the highest amount of NPAs in FY23, worth Rs 24,061 crore, and it had also recovered the highest amount at Rs 7,097 crore during the fiscal year. 

For SBI, the difference between the write-off amount in FY2015 and FY2023 was Rs 2,758 crore. During this period, the SBI’s highest write-off was Rs 58,905 crore recorded in FY2019. 

The bank’s recovery amount showed a 99 percent increase in the nine years period. However, it is the SBI’s lowest recovery in the last five years. The bank’s recovery peaked in FY2021, when it recovered a total of Rs 10,297 crore.  

The top five banks to write-off the highest amount of loans in FY2023 are SBI, Union Bank of India, Bank of Baroda, PNB, and the Central Bank of India – a total amount of Rs 88,070 crore.

The Union Bank of India wrote-off loans worth Rs 19,175 crore, Bank of Baroda wrote-off Rs 17,998 crore,  PNB wrote-off Rs 16,578 crore, and Central Bank of India wrote-off Rs 10,258 crore in FY2023. The remaining amount was written off by SBI.           

In fiscal year 2023, the top five banks to recover the highest amount of loans were SBI, PNB, Union Bank of India, Canara Bank, and Bank of Baroda. While the SBI recovered Rs 7,097 crore, PNB recovered written off loans worth Rs 6,508 crore, Union Bank of India recovered Rs 5,549 crore, Canara bank recovered Rs 5,110 crore, and Bank of Baroda recovered written off loans worth Rs 3,277 crore.