Banks write off Rs 9.95 lakh crore corporate, services loans in 12 years: Govt

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.

Replying to another question, the minister said 5,85,751 digital payment frauds were detected in the last five financial years involving Rs 3,590.70 crore. The government, RBI and NPCI have taken several initiatives to assess emerging cyber threats affecting digital payment systems and to strengthen cybersecurity, improve fraud detection, enhance consumer awareness and ensure timely redressal of complaints relating to digital payment frauds, he said.

In reply to a question, Chaudhary said India’s external debt stood at USD 762.8 billion and the ratio of short-term external debt to GDP stood at 4.1 per cent at the end of March 2026. The key external debt vulnerability indicators remain stable, indicating that India’s external debt levels are sustainable and prudently managed, he said.

“At end-March 2026, India’s external debt to GDP ratio stood at 20.8 per cent. The ratio of foreign exchange reserves to total external debt remained at 90.6 per cent, while short-term debt (original maturity) constituted 19.6 per cent of total external debt. The debt service ratio declined from 6.6 per cent at end-March 2025 to 5.8 per cent at end-March 2026,” he said.

To reduce strategic import dependence, he said, the government is also promoting domestic capacity creation in critical sectors, encouraging technology adoption and innovation, strengthening supply chain resilience, diversifying import sources for essential commodities such as crude oil, fertilisers and critical minerals, and accelerating investments in renewable energy and other emerging sectors. India also continues to maintain adequate foreign exchange reserves, which support external sector stability, he said.