Banks write off Rs 10 L-cr of large corporate loans
New Delhi: Banks have written off loans of Rs 9,95,000 crore given to large corporates and services in the last 12 financial years, Parliament was informed on Monday.
Write-offs touched a high of Rs 1,48,753 crore in 2018-19, which declined to Rs 20,485 crore in 2025-26, Minister of State for Finance Pankaj Chaudhary said in a written reply.
Sharing RBI data on outstanding loans to large industries and services, he said it has increased from Rs 63,19,057 crore in FY25 to Rs 69,21,734 crore in FY26.
Debt write-off is an accounting procedure and does not provide any relief to the debtor (whether farmer or corporate), he said.
According to the RBI – Resolution of Stressed Assets Directions 2025, issued for commercial banks, write-off (a major portion of which is due to technical/prudential/ advances under collection) is an accounting procedure undertaken by a bank to adjust its balance sheets, he added.
Such write-off does not result in waiver of liabilities of borrowers, and therefore, it does not benefit the borrower, he said.
The borrowers continue to be liable for repayment, and banks continue to pursue recovery actions initiated in these accounts, he said.
To provide relief to borrowers in distress, the Reserve Bank of India has issued Master Direction on Resolution of Stressed Assets, 2025, dated November 28, 2025 (updated as on July 1, 2026), which inter alia provides lenders the discretion to undertake financial restructuring of borrowers under stress, based on their Board-approved policies and regulatory guidelines, Chaudhary noted. In reply to another question, he said the government remains committed to maintaining fiscal prudence while supporting sustainable economic growth. The fiscal deficit of the central government has declined from 9.2 per cent of GDP in 2020-21 to 4.4 per cent in 2025-26 (Provisional Actuals), while total outstanding liabilities have moderated from 61.5 per cent of GDP in 2020-21 to 58.2 per cent in 2025-26 (Provisional), reflecting continued improvement in fiscal sustainability, he added.
At the same time, the capital expenditure has increased from Rs 4.3 lakh crore in 2020-21 to Rs 10.7 lakh crore in 2025-26 (Provisional Actuals), he said.
The domestic demand has also remained resilient, with real Private Final Consumption Expenditure growth accelerating to 7.7 per cent in 2025-26 from 5.8 per cent in 2024-25, he pointed out.
At the same time, he said, price stability has strengthened, with retail inflation averaging 2.1 per cent in 2025-26, the lowest level since 2014-15.
Labour market conditions have also continued to improve, with the unemployment rate (persons aged 15 years and above and as per usual status) declining from 6 per cent in 2017-18 to 3.1 per cent in 2025, he said, citing the Periodic Labour Force Survey.