Banks wrote off loans worth Rs 10.6 lakh crore in past five years: Finance Ministry

Scheduled commercial banks in India wrote off loans worth nearly Rs 10.6 lakh crore in the past five years, data tabled in Lok Sabha on Monday showed.

More than half of this amount, around Rs 5.5 lakh crore, involved loans given by banks to large industrial houses and services.

The information was tabled by Bhagwad Karad, the minister of state for finance, in response to a question by Lok Sabha MPs Abdul Khaleque, Mahesh Sahoo and M Badruddin Ajmal.

In the financial year 2022-’23, Indian banks wrote off Rs 2.09 lakh crore worth of loans, the data from the finance ministry showed. Of this, Rs 1.09 lakh crore belonged to large industries and services.

The write-offs helped banks reduce their burden of non-performing assets to a 10-year low of 3.9% of all loan advances as of March 2023, Mint reported. A non-performing asset is a loan for which the principal or interest payment has been overdue for 90 days or more. Without the write-offs, the burden on banks would have been around 7.4% of the loan advances.

At the end of fiscal 2017-’18, non-performing assets of Indian banks were worth Rs 10.21 lakh crore. This fell to Rs 5.55 lakh crore by the end of 2022-’23 because of the write-offs.

As per the central bank’s...

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