Banks have removed a total of ₹16.35 lakh crore in bad loans, known as non-performing assets (NPAs), over the last ten years. The highest amount was ₹2,36,265 crore written off in the year 2018-19, while the lowest was ₹58,786 crore in 2014-15. In the financial year 2023-24, banks wrote off ₹1,70,270 crore in bad loans, which is lower than the ₹2,16,324 crore written off the year before.
According to Finance Minister Nirmala Sitharaman, banks are allowed to write off bad loans if they have set aside enough money for them for four years, following rules by the Reserve Bank of India (RBI). However, this does not mean that borrowers are freed from their debts. Banks continue to work hard to recover money from borrowers through various methods. This includes going to civil courts or special tribunals to reclaim owed amounts.
As of December 31, 2024, there are 29 big companies labeled as NPAs by banks, each owing more than ₹1,000 crore. The total amount they owe is ₹61,027 crore. To recover outstanding payments, banks contact borrowers through calls and emails. If companies miss payments, banks can take them to the National Company Law Tribunal for a possible bankruptcy process.
In related news, Finance Minister Sitharaman announced that the government will create the 8th Central Pay Commission (CPC). The financial details will be revealed once the commission makes its recommendations.
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