Banks Write Off ₹9.95 Lakh Crore, Annual Amount Falls To ₹20,485 Crore

New Delhi: Banks wrote off loans worth Rs 9.95 lakh crore given to large industries and service-sector companies over the past 12 financial years, Parliament was informed on Monday.

Minister of State for Finance Pankaj Chaudhary said write-offs reached a peak of Rs 1,48,753 crore in 2018-19. The amount fell to Rs 20,485 crore in 2025-26.

Outstanding loans to large industries and services rose from Rs 63.19 lakh crore in 2024-25 to Rs 69.22 lakh crore in 2025-26, according to Reserve Bank of India data.

Write-Off Explained

Chaudhary stressed that writing off a loan is only an accounting step used by banks to clean up their balance sheets. It does not cancel the borrower’s debt or provide relief to the company.

Borrowers remain responsible for repaying the money, while banks continue recovery proceedings against them. A major part of such loans remains under collection even after being removed from banks’ balance sheets.

The RBI’s stressed-assets rules also allow lenders to restructure the finances of borrowers facing difficulties. Such decisions must follow each lender’s board-approved policy and the central bank’s guidelines.

Fiscal Position

In a separate reply, the minister said the Centre’s fiscal deficit declined from 9.2 per cent of GDP in 2020-21 to 4.4 per cent in 2025-26.

Government liabilities also eased from 61.5 percent to 58.2 percent of GDP during the period. Capital spending increased from Rs 4.3 lakh crore to Rs 10.7 lakh crore.

Private consumption growth accelerated to 7.7 per cent in 2025-26 from 5.8 per cent a year earlier. Retail inflation averaged 2.1 per cent, its lowest level since 2014-15.

Digital Frauds

The minister said 5,85,751 digital payment frauds involving Rs 3,590.70 crore were detected during the past five financial years.

He said the government, RBI and National Payments Corporation of India were strengthening cyber security, fraud detection, public awareness and complaint-handling systems.

External Debt

India’s external debt stood at USD 762.8 billion at the end of March 2026, equal to 20.8 per cent of GDP. Foreign exchange reserves covered 90.6 per cent of external debt.

Short-term debt accounted for 19.6 percent of the total, while the debt-service ratio improved to 5.8 percent from 6.6 percent a year earlier. The government said these indicators showed that India’s external debt remained manageable.