Banks have written off loans worth nearly Rs 10 lakh crore extended to large corporates and the services sector over the past 12 financial years, Parliament was informed on Monday, highlighting the scale of bad-debt resolution and loan clean-up undertaken by the banking sector during the period.
According to data presented by the government, banks wrote off a total of Rs 9,95,000 crore in loans to large industries and services between 2014-15 and 2025-26. The figures were shared by Minister of State for Finance Pankaj Chaudhary in a written reply in Parliament.
Loan write-offs reached their highest level during 2018-19, when banks wrote off Rs 1,48,753 crore. Since then, the annual amount has generally declined, with write-offs falling to Rs 20,485 crore in 2025-26.
The sharp reduction in write-offs in recent years comes against the backdrop of measures taken by banks and regulators to strengthen asset quality, improve recovery mechanisms and address stressed assets. The banking sector had faced significant challenges from accumulated bad loans, particularly among large industrial borrowers, during the earlier part of the period.
The government’s response also provided data on outstanding bank credit to large industries and services. According to Reserve Bank of India data cited in Parliament, outstanding loans to these segments increased from Rs 63,19,057 crore in 2024-25 to Rs 69,21,734 crore in 2025-26.
The increase represents a rise of more than Rs 6 lakh crore in outstanding credit during the financial year, indicating continued demand for bank financing from large industrial and services businesses.
Loan write-offs are an accounting measure through which banks remove loans classified as bad or non-performing from their balance sheets after making the required provisions. A write-off, however, does not necessarily mean that the borrower is relieved of the obligation to repay the outstanding amount. Banks can continue recovery proceedings against borrowers even after loans have been written off.
The government has in recent years focused on improving the health of the banking system through measures aimed at strengthening capital positions, improving recognition of stressed assets and facilitating recoveries. Banks have also relied on various legal and institutional mechanisms to recover dues from defaulting borrowers.
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The peak in write-offs in 2018-19 reflected the broader clean-up of bank balance sheets following years of accumulated stressed assets. The subsequent decline suggests that the volume of loans being written off has moderated considerably compared with the levels seen during the peak period.
At the same time, the rise in outstanding credit to large industries and services in FY26 points to an expansion in lending to these sectors. Higher credit availability can support investment, capacity expansion and economic activity, although banks continue to remain focused on maintaining asset quality and managing credit risks.
The latest figures therefore present two contrasting trends in the banking sector: a substantial decline in annual loan write-offs from their 2018-19 peak, alongside a significant increase in outstanding credit to large industries and services.
The data provided in Parliament offers a snapshot of the banking sector’s efforts to deal with legacy stressed assets while continuing to expand lending to key segments of the economy.
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