India's banks wrote off Rs 2 trillion worth of bad loans in 2018-19

Even as banks have written off more loans than before, recovery of bad loans has also improved substantially in the past couple of years

India’s 42 scheduled commercial banks (SCBs) collectively wrote off Rs 2.12 trillion worth of loans in 2018-19, according to figures given by the finance ministry in Parliament. Not only was this 42 per cent higher than the Rs 1.5 trillion written off the previous year, but also about 20 per cent of all their non-performing assets (NPAs).

Banks generally take NPAs off their books to make their balance sheets look cleaner — with reduced liabilities and potential losses. According to Reserve Bank of India (RBI) guidelines, "non-performing loans, including, those in respect of which full provisioning has been made on completion