Indian Banks Wrote Off ₹9.95 Lakh Crore in Corporate Loans

Indian banks have written off a staggering Rs 9,95,000 crore in loans extended to large corporates and services over the past 12 financial years, Minister of State for Finance Pankaj Chaudhary confirmed.

This significant financial adjustment highlights ongoing efforts to manage non-performing assets within the banking sector.

Key Financial Figures

Indian banks wrote off a substantial Rs 9,95,000 crore in loans to large corporates and services over 12 financial years.

Write-offs reached their highest point at Rs 1,48,753 crore during the 2018-19 fiscal year.

This figure subsequently decreased to Rs 20,485 crore by the 2025-26 fiscal year.

Outstanding loans for large industries and services grew from Rs 63,19,057 crore in FY25 to Rs 69,21,734 crore in FY26, according to RBI data.

Chaudhary clarified that a debt write-off is primarily an accounting procedure, emphasizing that it does not provide any relief or waiver to the debtor, whether a farmer or a corporate entity.

Understanding the Write-Off Mechanism

As per the Reserve Bank of India’s (RBI) Resolution of Stressed Assets Directions 2025 for commercial banks, write-offs are an accounting adjustment.

The majority of these write-offs are due to technical, prudential, or advances under collection reasons, undertaken by banks to adjust their balance sheets.

A debt write-off is fundamentally an accounting procedure designed to adjust a bank’s balance sheets.

Crucially, this procedure does not relieve the debtor, whether a corporate entity or an individual, of their repayment obligations.

Borrowers remain legally liable for repayment, irrespective of the write-off.

Banks are mandated to continue pursuing recovery actions for these accounts despite the write-off.

This mechanism underscores that while banks clear their books, the responsibility for debt repayment firmly remains with the borrowers.