Loan write-offs are not waive-offs, says FM

Amid criticism over large write-offs, FM says banks are empowered legally to chase defaulters and recover money

- EXPRESS NEWS SERVICE @ Mumbai

FINANCE minister Nirmala Sitharaman has defended the massive write-offs of bad loans by banks (to the tune of Rs 16.35 lakh crore in the past 10 years) saying bad loan write-offs do not mean waive-offs and that banks are empowered legally to chase the defaulters and recover the money.

Since the insolvency and bankruptcy regime has come into force in May 2016, banks' bad loan pile has come down massively—from around 13% in FY14 to a low of 2.5% in terms of gross NPAs and over 4% in net NPAs to a low of 0.65% as of December 2024. But this has come at a huge cost to banks as the recovery through the Insolvency and Bankruptcy Code has only averaged at 32% in all these years.