Banks have written off loans amounting to INR 9,95,000 crore extended to large corporates and the services sector over the past 12 financial years, Parliament was informed. The figures were shared by Minister of State for Finance Pankaj Chaudhary in a written reply based on data from the Reserve Bank of India (RBI). 
Loan write-offs in this segment were at their highest at INR 1,48,753 crore in 2018-19. The amount has since declined considerably and stood at INR 20,485 crore in 2025-26. 
Chaudhary clarified that a loan write-off is an accounting procedure and does not amount to a waiver of the borrower’s liability. The clarification applies to corporate borrowers as well as other categories of borrowers. 
According to the RBI’s Resolution of Stressed Assets Directions, 2025, a write-off is undertaken by banks to adjust their balance sheets. A major portion of such write-offs relates to technical or prudential write-offs and advances that remain under collection. The accounting treatment does not remove the borrower’s obligation to repay the outstanding amount. 
Borrowers therefore continue to remain liable for repayment, while banks can continue recovery proceedings in these accounts. This distinction is important because a reduction in a bank’s reported loan assets through a write-off does not mean that the underlying debt has been legally waived. 
At the same time, outstanding loans to large industries and services increased from INR 63,19,057 crore in FY25 to INR 69,21,734 crore in FY26, indicating continued credit exposure to these sectors. 
For borrowers facing financial stress, the RBI’s Master Direction on Resolution of Stressed Assets, 2025, updated as of July 1, 2026, allows lenders to consider financial restructuring based on their board-approved policies and applicable regulatory requirements. The framework is intended to provide lenders with a mechanism to address stressed accounts without treating every stressed loan as a case for immediate recovery or write-off. 
In a separate response, the Finance Ministry said the government remains focused on maintaining fiscal prudence while supporting sustainable economic growth. 
The central government’s fiscal deficit declined from 9.2 per cent of GDP in 2020-21 to 4.4 per cent in 2025-26, based on provisional actuals. Total outstanding liabilities also moderated from 61.5 per cent of GDP in 2020-21 to 58.2 per cent in 2025-26. 
Capital expenditure, however, increased substantially during the same period. It rose from INR 4.3 lakh crore in 2020-21 to INR 10.7 lakh crore in 2025-26, according to provisional actuals. 
Domestic consumption also remained firm. Real Private Final Consumption Expenditure growth accelerated to 7.7 per cent in 2025-26 from 5.8 per cent in 2024-25. 
Retail inflation averaged 2.1 per cent in 2025-26, the lowest average level since 2014-15, pointing to a period of relatively lower price pressures. 
Labour market conditions also showed improvement. Citing Periodic Labour Force Survey data, the minister said the unemployment rate for persons aged 15 years and above, measured according to usual status, declined from 6 per cent in 2017-18 to 3.1 per cent in 2025. 
The government also shared data on fraud involving digital payments. A total of 5,85,751 digital payment fraud cases were detected over the last five financial years, involving INR 3,590.70 crore. 
The government, RBI and National Payments Corporation of India (NPCI) have taken measures to identify emerging cyber threats affecting digital payment systems and strengthen cybersecurity. These measures also include improving fraud detection, increasing consumer awareness and ensuring timely resolution of complaints related to digital payment fraud. 
India’s external debt stood at USD 762.8 billion at the end of March 2026, according to RBI data. The stock increased by USD 26.3 billion from the previous year, while the external debt-to-GDP ratio rose to 20.8 per cent from 19.8 per cent. 
The RBI data showed that the long-term component of external debt, with an original maturity of more than one year, stood at USD 613.5 billion, an increase of USD 11.6 billion from the previous year. Short-term debt accounted for 19.6 per cent of total external debt, compared with 18.3 per cent a year earlier. 
The ratio of short-term debt to foreign exchange reserves also increased to 21.6 per cent from 20.1 per cent. On a residual maturity basis, which includes long-term debt falling due within the following 12 months, short-term debt represented 42.9 per cent of total external debt. 
US dollar-denominated debt remained the largest component, accounting for 55.5 per cent of total external debt. Indian rupee-denominated debt accounted for 29.4 per cent, followed by Japanese yen at 6.4 per cent, Special Drawing Rights at 4.3 per cent and the euro at 3.7 per cent. Loans were the largest component of external debt at 34.7 per cent, followed by currency and deposits at 22.3 per cent, trade credit and advances at 19 per cent, and debt securities at 16.1 per cent. 
The increase in the external debt stock was partly offset by a valuation effect arising from the appreciation of the US dollar against the Indian rupee and other major currencies. The valuation impact was USD 24.6 billion. Without this effect, the RBI said the increase in external debt would have been USD 51 billion instead of USD 26.3 billion. 
The RBI also reported that general government external debt declined during the year, while non-government debt increased. Non-financial corporations accounted for the largest share of India’s external debt at 36.4 per cent, followed by deposit-taking corporations excluding the central bank at 26.5 per cent, general government at 22 per cent and other financial corporations at 10.2 per cent. 
The government said the external debt indicators remained stable and that the country’s external debt was being managed prudently. It also pointed to adequate foreign exchange reserves as a support for external sector stability. 
The government is also working to reduce strategic dependence on imports by building domestic capacity in critical sectors. The measures include encouraging technology adoption and innovation, strengthening supply chains and diversifying sources of essential imports. 
The focus areas include commodities such as crude oil, fertilisers and critical minerals, along with greater investment in renewable energy and other emerging sectors. 
Source PTI