Indian banks record massive corporate loan write-offs

Indian public sector banks have recorded massive loan write-offs, raising questions regarding financial transparency and accountability. Bank of Baroda reported writing off ₹35,715 crore in accounts of ₹100 crore and above between FY20-21 and FY25-26, with recovery rates standing at less than 28 percent. Efforts to identify these borrowers through the Right to Information Act have been blocked by banks citing privacy concerns and confidentiality clauses.

On a broader scale, nearly ₹9.95 lakh crore in corporate loans have been written off by banks over a twelve-year period. While the Reserve Bank of India notes that technical write-offs are accounting treatments that do not extinguish lender claims, the scale of these losses highlights significant financial distress.

Critics point to a perceived asymmetry in fiscal policy, noting that while the government manages massive corporate write-offs, it cites “fiscal prudence” to decline proposals such as the restoration of the Old Pension Scheme for public employees.