Key Highlights
- Public Sector Banks have expensed over ₹12 lakh crore as non‑performing assets (NPAs) from FY2016 to FY2025.
- Despite the large write‑offs, recovery operations via DRT, SARFAESI, NCLT and other legal avenues remain active.
- Recruitment of 48,570 personnel across PSBs is underway, filling 96 % of the current staffing shortfall.
- Major banks such as State Bank of India and Canara Bank exhibit a rise in NPA write‑offs during FY2025.
Detailed Insights
Under Reserve Bank of India guidelines, a bank can declare an NPA dormant after four years if full provisioning is made; however, this does not absolve the borrower of liability. The Ministry of Finance disclosed that the cumulative amount written off by the 12 PSBs has reached ₹12,08,828 crore, with ₹5.82 lakh crore accumulated in the period FY2021‑2025 alone. Recovery remains robust, with 1,629 borrowers flagged as wilful defaulters and assets totaling more than ₹15,000 crore seized under PMLA and ₹750 crore under FEOA. In addition, over ₹25,000 crore of fraud proceeds has been returned to affected banks. The legal framework—Debt Recovery Tribunals, SARFAESI Act, NCLT under IBC—continues to enforce claims.
In terms of human resources, 1.48 lakh employees were inducted between FY2020 and FY2025, and this year’s hiring drive of 48,570 positions is aimed at closing the gap caused by retirements, superannuation and voluntary exits.
Key Concepts
- Non‑Performing Asset (NPA): A loan or advance that has not earned any interest or principal over a specified period.
- Debt Recovery Tribunal (DRT): A quasi‑judicial body that adjudicates claims against defaulters and orders recovery.
- PMLA: The Prevention of Money Laundering Act, under which assets can be frozen and confiscated.
- FEOA: The Fugitive Economic Offenders Act, which lets the state confiscate assets of criminals versus offenders.
- Insolvency and Bankruptcy Code (IBC): The legal framework that governs corporate insolvency, including the role of NCLT.