In response to a Lok Sabha query on loan write-offs for large corporates over the past ten years, the Finance Minister revealed that of the ₹1.7 lakh crore in total non-performing assets (NPAs) written off in FY24, ₹68,366 crore was linked to large industries and services. In contrast, NPAs from large corporate borrowers stood at ₹1.6 lakh crore in FY20, accounting for 68% of total write-offs that year, which amounted to ₹2.3 lakh crore.
Between FY15 and FY23, large corporate houses accounted for nearly 60% of total bad loans written off, with annual write-offs ranging between ₹1.3 lakh crore and ₹1.6 lakh crore from FY19 to FY21.
NPAs written off for large industries and services
| Financial year | NPAs written off (₹ crore) | As % of total NPAs |
|---|---|---|
| 2014-15 | 31,723 | 53.96% |
| 2015-16 | 40,416 | 57.40% |
| 2016-17 | 68,308 | 63.03% |
| 2017-18 | 99,132 | 61.45% |
| 2018-19 | 1,48,753 | 62.96% |
| 2019-20 | 1,59,139 | 67.96% |
| 2020-21 | 1,27,050 | 62.20% |
| 2021-22 | 69,532 | 39.69% |
| 2022-23 | 1,14,528 | 52.94% |
| 2023-24 | 68,366 | 40.15% |
Source: RBI
Credit quality of large borrowers improves
According to RBI data, scheduled commercial banks currently have 29 unique borrower companies classified as NPAs, each with an outstanding loan of at least ₹1,000 crore. The total outstanding debt of these borrowers stood at ₹61,027 crore as of December 2024.
The credit quality of large borrowers has improved in recent years, with their share in gross non-performing assets (GNPAs) declining faster than their share in overall credit. The GNPA ratio for large borrower portfolios fell from 4.5% in March 2023 to 2.4% in September 2024, according to the RBI’s Financial Institutions: Soundness and Resilience report.
Additionally, the share of standard assets in the total funded amount within the large borrower segment has consistently improved over the past two years. The proportion of the top 100 borrowers in the total funded credit declined to 34.6% in September 2024, indicating a growing credit appetite among mid-sized borrowers. Notably, none of the top 100 borrowers were classified as NPAs as of September 2024.
Write-offs do not mean loan waivers
It is important to note that loan write-offs do not equate to waivers of borrower liabilities, nor do they provide any direct benefit to defaulters. Banks continue to pursue recovery actions against defaulting borrowers through various mechanisms, including:
– Civil court proceedings
– Debt recovery tribunals
– Asset reconstruction and insolvency proceedings.
