Indian banks have recovered a mere 16% of the Rs 16.6 lakh crore in loans written off over the past decade, according to data provided by the Reserve Bank of India (RBI) in response to a Right to Information (RTI) query filed by civil rights activist Praful P. Sarda.
Between April 1, 2014, and September 30, 2024, banks wrote off loans totaling Rs 16,61,310 crore but managed to recover only Rs 2,69,795 crore.
The data highlights a significant gap in recovery rates across public sector, private sector, and urban cooperative banks.
Public sector banks accounted for the largest share of loan write-offs at Rs 12,08,621 crore, recovering Rs 2,16,547 crore. Private sector banks wrote off Rs 4,46,669 crore, with recoveries amounting to Rs 53,248 crore. Urban cooperative banks wrote off Rs 6,020 crore; however, recovery data for this segment was not available.
This leaves Rs 13,91,515 crore unrecovered, translating to an overall recovery rate of approximately 16%.
Data disclosed in November 2024 by Union Minister of State for Finance Pankaj Chaudhary revealed that bank write-offs for FY2023-24 stood at Rs 1.7 lakh crore, marking the lowest figure in five years. Write-offs had peaked at Rs 2.34 lakh crore in FY2019-20.
Public sector banks, including Punjab National Bank, Union Bank of India, and State Bank of India, reported the highest write-offs, while HDFC Bank, Axis Bank, and ICICI Bank led among private sector lenders. Despite the overall decline in FY24, over 20% of banks reported an increase in write-offs compared to the previous year.
The RBI explained that write-offs are largely technical or prudential, serving as an accounting mechanism to manage balance sheets and improve tax efficiency. While loans are written off, borrowers are still obligated to repay, and banks retain the right to pursue recovery.
A separate RTI response from August 2024 indicated that recovery rates for written-off loans in the last five years stood at 18.7%.
The figures provided by the RBI for September 2024 remain provisional and exclude state cooperative banks and district central cooperative banks, as the RBI does not collect data from these institutions. All figures are derived from banks’ off-site returns.