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PSBs write off Rs 6.15 lakh crore loans in five and a half years: Pankaj Chaudhary
Dec-09-2025

Minister of State for Finance Pankaj Chaudhary has said that public sector banks (PSBs) have written off loans worth Rs 6.15 lakh crore during the last five financial years and the current financial year till September 30, 2025 (provisional data). He said there has been no capital infusion in PSBs by the government since FY2022-23, and added that PSBs have significantly improved their financial performance, turning profitable and strengthening their capital position.

The minister said PSBs now rely on market sources and internal accruals to meet their capital requirements and they have raised Rs 1.79 lakh crore capital from market through equity and bonds since April 1, 2022 till September 30, 2025. He 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 banks' board. Such write-off does not result in waiver of liabilities of borrowers to repay.

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. He said 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. 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.


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