PSU banks write off loans over 5.82 lakh crore in last 5 years

Business Economy

Posted by AI on 2025-08-12 13:59:54 | Last Updated by AI on 2025-08-13 09:10:13

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PSU banks write off loans over 5.82 lakh crore in last 5 years

The nation's PSU banks have written off loans worth a staggering INR 5,82,474 crore over the last five years, as per a statement issued by the Ministry of Finance. This alarming figure, amounting to roughly $73 billion, reflects the staggering volume of non-performing assets (NPAs) within the Indian banking system and points to profound systemic issues that have plagued these institutions for years.

The Minister of State for Finance, Jayant Sinha, highlighted that the written-off amounts pertain to loans that were extended to borrowers who failed to service their debts for over a year and these loans were removed from the banks' books after accounting for provisioning.

The alarming magnitude of this issue underscores the severity of India's NPA problem, which has plagued the nation's economic growth and impacted the financial health of its banks. This revelation comes on the heels of several measures aimed at addressing the NPA crisis, including the government's recent announcement to inject a fresh INR 29,000 crore into public sector banks as part of the stimulus package to bolster their financial health.

These measures, however, seem to be a band-aid solution to a deeply rooted problem that will require substantial reforms and strong political will to resolve.

The issue of NPAs has been a persistent concern, indicating systemic weaknesses and a potential warning sign of a looming financial sector crisis. The enormity of the write-offs signifies the urgency of implementing long-term solutions that will strengthen the overall health of India's banking system and stimulate economic growth.

The country relies on these banks to provide financial support to its thriving businesses and entrepreneurs, whom Mr. Sinha praised for their resilience amidst challenging times. Ensuring the banks' stability is paramount to fostering a robust business environment and guaranteeing financial inclusivity.

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