Indian banks wrote off more than Rs 10 trillion loans in five years, says government

Banks write off the loans in an attempt to clean up their balance sheets after setting aside adequate provisions. Once an account has been written off, it doesn't show as an asset on the bank's balance sheet, but efforts to recover the dues through bankruptcy proceedings or sale of bad loans continue.

The state-owned banks have recovered loans worth Rs 4.80 trillion in the last five financial years, including Rs 1.03 trillion from written-off assets, according to the central bank data, the finance ministry reply pointed out.

Overall, the health of Indian banks has improved with gross non-performing asset ratio of scheduled commercial banks falling to 5.9 percent in March 2022, the central bank had said in its bi-annual publication earlier this year. The report also highlighted that the ratio could decline further to 5.3 percent by the end of this March.