PSU bank loan write-offs: ₹12 lakh crore in 10 years

Public sector bank (PSB) loan write-offs are back in focus after fresh Parliament-linked numbers started circulating across Reddit and other social platforms. The discussion mixes official totals, bank-wise breakups, and recovery ratios. Much of the debate is about what a “write-off” means and what it does not mean. Another big theme is whether write-offs reflect weak credit culture or overdue balance-sheet cleanup. The same datasets are also being linked to the sharp fall in gross NPAs in recent years. Below is what the widely shared figures say, and what they imply.

Why the ₹12 lakh crore number is trending

The key trigger is a government response in Parliament. Social posts point to Finance Ministry data shared in the Rajya Sabha. The date cited is July 22, 2025. The headline figure shared is ₹12,08,828 crore. This total covers FY2015-16 through FY2024-25. Users are debating scale and accountability. Others are focusing on the recent five-year concentration. Many posts also compare write-offs with recoveries. The conversation has now broadened to asset quality trends.

What a “loan write-off” means in banking terms

Posts referencing the government reply say write-offs relate to NPAs. The common definition repeated is overdue beyond 90 days. The description also says such assets are fully provisioned. After provisioning, banks remove them from their books. The rationale cited is RBI guidelines and board-approved policy. Another detail shared is a timing rule of four years after provisioning. Importantly, the same threads stress that write-off is an accounting action. It does not automatically mean the borrower is legally discharged. Recovery actions can still continue after write-off.

Ten-year total disclosed to Parliament

The ten-year aggregate cited for PSBs is ₹12,08,828 crore. This is framed as write-offs between FY16 and FY25. The disclosure is attributed to the Finance Ministry. The minister named in social recaps is Pankaj Chaudhary. The data is repeatedly described as “bad loans” or NPAs. Posts also highlight that the five-year number is a large share of the decade. Some users mix PSB-only totals with “commercial banks” totals. Where “commercial banks” is cited, the ten-year total discussed is ₹12.3 lakh crore for FY15-FY24. Those two timelines are different, so the totals are not identical.

Last five years: ₹5.82 lakh crore, with FY21 peak

A widely repeated figure is ₹5.82 lakh crore of PSB write-offs in FY21-FY25. The highest single-year write-off cited is ₹1.33 lakh crore in 2020-21. Posts frame that spike as part of balance-sheet cleanup efforts. Another shared point is that write-offs have trended down more recently. One specific comparison cited is FY2024-25 write-offs of ₹91,260 crore. That is said to be lower than ₹1.15 lakh crore in the previous year. Social commentary reads this as a downward trend. Some posts add that 10 of 12 PSBs saw declines over five years. They also claim SBI and Canara Bank rose in FY25.

Which PSBs led write-offs in FY21-FY25

Bank-wise leaderboards are central to the online debate. The most cited cumulative figure is SBI at ₹1.14 lakh crore over five years. Union Bank is cited next at ₹85,540 crore. PNB is cited at ₹81,243 crore. Bank of Baroda is cited at ₹70,061 crore. Canara Bank is cited at ₹56,491 crore. Several posts also cite FY25-only write-offs for the top names. SBI is cited at ₹20,309 crore in FY25. PNB and Union Bank are cited at ₹12,159 crore and ₹11,634 crore.

Recoveries: ₹1.65 lakh crore in five years, but rates differ

One widely shared number is PSB recoveries of ₹1.65 lakh crore. This recovery is for the same five-year period as the ₹5.82 lakh crore write-offs. Several posts calculate this as roughly 28% recovery. Separately, other social summaries cite lower recovery ratios. One such claim says overall recovery is often estimated at 12-20%. Another cites ₹1.61 lakh crore recovered versus ₹10.42 lakh crore written off, or 15.45%. These are not the same windows or denominators. The debate online often misses that mismatch. What is consistent is that recoveries are a key point of scrutiny.

Asset quality: GNPA ratio and GNPA stock are cited falling

Many posts connect write-offs to a cleaner balance sheet. A specific claim shared is that gross NPA ratio fell sharply. The ratio cited is 9.11% in March 2021. The later ratio cited is 2.58% by March 2025. Alongside ratios, absolute GNPA amounts are also shared. Gross NPAs are cited at ₹6.17 lakh crore in 2021. They are cited at ₹2.84 lakh crore in 2025. Social users interpret this as improved asset quality. Some attribute it to write-offs plus regulatory reforms. Others argue write-offs can mask weak underwriting. The numbers are being used to support both narratives.

Why FY19 and the AQR keep coming up

Some viral explainers broaden the lens to all commercial banks. They say write-offs peaked in FY19 at about ₹2.4 lakh crore. The reason cited is the Asset Quality Review that began in 2015. The same posts say write-offs fell to ₹1.7 lakh crore in FY24. They also cite total bank credit of around ₹165 lakh crore. In that framing, FY24 write-offs are said to be about 1% of total credit. These figures are often used to argue the peak was a one-off cleanup. Others see it as evidence of long-tail resolution issues. The AQR reference is now a recurring anchor in threads.

What investors and depositors are debating now

The most common confusion is whether write-offs equal waiver. The posts that cite RBI rules stress it is a book-cleaning step. Another investor concern is the pace of recoveries after write-off. The ₹1.65 lakh crore recovery figure is used as a benchmark. Some users focus on bank-level governance and borrower accountability. Others focus on whether lower GNPA ratios improve valuations. The bank-wise lists also drive comparisons across PSBs. FY25 increases for SBI and Canara are highlighted in that context. The debate remains split between “cleanup” and “leakage” interpretations.

What to watch next from the same dataset

FY2024-25 is being watched for the direction of write-offs. The cited fall to ₹91,260 crore is a key marker. Bank-wise movements will matter as much as the total. Social summaries claim most PSBs saw declines over five years. They also claim SBI and Canara rose in FY25. Another watch point is how recoveries are reported against written-off pools. Different time windows can change the recovery ratio meaningfully. Investors will likely track GNPA trends alongside write-offs. The March 2025 GNPA ratio cited at 2.58% is now a reference point. Future disclosures to Parliament could sharpen or revise these narratives.