Public Sector Banks Navigate Write-Offs and Recoveries

Public sector banks in India have written off loans worth Rs 6.15 lakh crore over the last five years, improving financial performance and turning profitable. They now depend on market sources for capital, raising Rs 1.79 lakh crore since 2022. Recovery from written-off loans continues under various mechanisms.

Government data reveals that public sector banks in India have written off loans amounting to Rs 6.15 lakh crore over the past five and a half years. Informed in a parliamentary session, Minister of State for Finance Pankaj Chaudhary outlined these figures based on Reserve Bank of India statistics.

Despite no capital infusion from the government since FY2022-23, these banks have bolstered their financial standings, achieving profitability and strengthening their capital structures. They have raised Rs 1.79 lakh crore through market instruments since 2022, highlighting a shift towards reliance on internal accruals and equity sources.

Banks continue rigorous debt recovery processes under multiple legal frameworks, including civil courts and the SARFAESI Act, ensuring that written-off loans do not translate into liability waivers. Moreover, with increasing cyber fraud incidents, vigilance in digital transaction security remains paramount.

(With inputs from agencies.)