Now Reading: PSB bad loan write-offs fall 40% as recoveries surge
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PSB bad loan write-offs fall 40% as recoveries surge
Public sector banks wrote off only ₹70,528 crore in bad loans in 2025-26, nearly 40% lower than five years ago, The Hindu's analysis of government data shows. Recoveries from written-off loans rose…
The Story in Brief
Public sector banks wrote off only ₹70,528 crore in bad loans in 2025-26, nearly 40% lower than five years ago, The Hindu's analysis of government data shows. Recoveries from written-off loans rose to ₹42,889 crore in the same period, up from ₹24,739 crore in 2021-22, pushing the recovery-to-write-off ratio to 60.8%.
The data also reveals a sharp shift in beneficiaries. Large industries' share of write-offs fell from 90% in 2022-23 to 29% in 2025-26, meaning most write-offs now pertain to individuals, MSMEs, and farmers. The government stressed that write-offs are an accounting procedure and borrowers remain liable for repayment.
The Indian Opinion
The common narrative that write-offs are a free pass for big corporates no longer holds. Large industry loans now account for only 29% of write-offs, down from 90%. The real story is the shift to smaller borrowers, individuals, MSMEs, and farmers. Yet the recovery rate, while improving to 61%, still leaves a gap. The question is whether this recovery rate can be sustained as the mix shifts to smaller, harder-to-recover loans.
Source: thehindu.com
This story was synthesised by AI from the source linked above.
