Indian banks have written off loans worth more than ₹19 lakh crore over the past 11 financial years, with a notable shift in trends as retail loans emerged as the largest contributor to write-offs in FY24–25, according to data shared by the Union ministry of finance in Parliament.
In a written reply to the Lok Sabha, minister of state for finance Pankaj Chaudhary says banks wrote off ₹9.75 lakh crore in the past 11 years, while broader category-wise data presented showed total write-offs across sectors at around ₹19.05 lakh crore.
The data underscores a structural transition in India’s bad loan landscape—from large corporate defaults dominating earlier years to rising stress in retail lending in recent years. The rise in retail loan write-offs, coupled with evolving delinquency patterns, suggests that while banks have made progress in cleaning up legacy corporate bad loans, the next phase of risk may increasingly lie in the fast-expanding retail lending segment.
Abhishek Banerjee, a member of Parliament (MP) from Trinamool Congress, had asked for the total amount of loans written off during the past 11 years for farmers, industrialists, micro, small and medium enterprises (MSMEs) and other categories.
In his reply, the minister says loan write-offs peaked in FY19–20 at ₹1.59 lakh crore before witnessing a gradual decline to ₹47,568 crore in FY24–25.
Earlier years saw a steady rise: ₹31,723 crore in FY14-15, ₹40,416 crore in FY15-16, ₹68,308 crore in FY16-17, and ₹99,132 crore in FY17-18. Write-offs crossed the ₹1 lakh crore mark in FY18–19 and surged further in FY19-20, reflecting the clean-up of bank balance sheets during the peak of the non-performing asset (NPA) crisis.
In a significant shift, retail loans accounted for the highest write-offs in FY24-25 at ₹45,404 crore, surpassing all other sectors. This marks the first time that retail lending has topped the write-off charts.
By comparison, in FY24-25, industry loans stood at ₹37,716 crore, services at ₹38,438 crore, MSMEs at ₹28,587 crore, and agriculture at ₹21,882 crore.
The growing share of retail loans in write-offs has risen sharply over the years—from 6.8% in FY14-15 to over 26% in FY24-25, reflecting rapid expansion in consumer credit and emerging stress in unsecured lending segments.
Despite the rise in retail write-offs, large industries and services accounted for a substantial portion of bad loans over the 11-year period. Write-offs in this category peaked at ₹1.59 lakh crore in FY19-20 and remained elevated in subsequent years before tapering off.
However, the government clarified that the Reserve Bank of India (RBI) does not maintain borrower-level or company-specific data for written-off loans.
The government reiterated that loan write-offs are an accounting exercise and do not imply waiver of loans. Banks write off NPAs as per RBI guidelines after full provisioning, but borrowers remain legally liable to repay dues.
Banks continue recovery efforts through various mechanisms, including insolvency proceedings, asset reconstruction and legal action.
Recovery from written-off accounts has shown improvement in recent years, rising from about 19.1% in FY21–22 to around 34.8% in FY24–25, according to government data.
However, the surge in retail write-offs aligns with concerns flagged earlier by RBI over rapid growth in unsecured personal loans, particularly credit card borrowings.
While stress indicators have shown some moderation, public sector banks (PSBs) reported rising early-stage delinquencies in late-2025, and non-banking financial companies (NBFCs) continue to record relatively higher delinquency levels in certain loan categories.
The latest data highlights a clear transition in India’s banking system, from a corporate-led NPA crisis in the previous decade to growing vulnerabilities in consumer credit.
