Public sector banks have written off loans worth ₹6.15 lakh crore in the last five and a half years, Parliament was informed on Monday.

In a written reply in Lok Sabha, minister of state for finance Pankaj Chaudhary said, “According to Reserve Bank of India (RBI) data, PSBs have written-off an aggregate loan amount of ₹6,15,647 crore, during the last five financial years and the current financial year till September 30, 2025 (provisional data).”

The process followed RBI guidelines of provisioning of NPAs and those of the policy of the board of the banks, even as such write-offs did not result in waiver of liabilities of borrowers to repay, he added.

Recovery in written-off loans is an ongoing process and banks continue pursuing their recovery actions initiated against borrowers under the various recovery mechanism available to them, such as filing of a suit in civil courts or in debt recovery tribunals (DRT), action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002, filing of cases in the National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code, 2016 etc.

As provisioning for bad loans has already been done and the write-off process does not entail any actual cash outflow, the bank’s liquidity position remains intact, Chaudhary informed the LS.

Moreover, banks evaluate/consider the impact of write-offs as part of their regular exercise to clean up their balance-sheet, avail tax benefit, optimise capital base, enhance lending capacity and boost investor sentiments, the minister informed.