Bank of Baroda Written Off ₹35,715 Crore in Large Defaulter Loans Since FY21, RTI Reveals Low Recovery and Exemption Claims
NEW DELHI: State-run Bank of Baroda (BoB) has technically written off bad loans totaling ₹35,715 crore belonging to high-value borrowers with individual default balances of ₹100 crore and above over a six-year period from FY20-21 to FY25-26, according to official disclosures made under the Right to Information (RTI) Act.
The data, obtained by Pune-based RTI activist Vivek Velankar, shows that during the same six-year timeframe, cumulative recoveries from these large written-off accounts stood at ₹9,946 crore—representing a recovery rate under 28 percent. Furthermore, the public sector lender recorded ₹7,817 crore as haircuts/write-offs associated with compromise settlements for accounts in the same high-value bracket.
Breakdown of Technical Write-Offs and Recovery Record
According to the RTI response issued by the bank's Public Information Officer, the distribution of large loan write-offs and subsequent recoveries spanned six financial years:
- Peak Write-Off Years: The highest volume of technical write-offs occurred during FY20-21 (₹11,916 crore) and FY21-22 (₹11,261 crore), reflecting heavy balance sheet cleanup operations during those fiscal periods.
- Subsequent Fiscal Figures: Technical write-offs for accounts exceeding ₹100 crore were reported at ₹3,889 crore in FY22-23, ₹3,863 crore in FY23-24, ₹2,398 crore in FY24-25, and ₹2,388 crore in FY25-26.
- Recovery Performance: The total recovery of ₹9,946 crore from written-off accounts indicates that over 72 percent of the aggregate written-off principal remains unrecovered to date.
- Settlement Haircuts: Compromise settlements yielded ₹7,817 crore in written-off amounts (haircuts), with the largest annual haircuts logged in FY21-22 (₹3,132 crore) and FY20-21 (₹2,331 crore).
Privacy Exemptions and the Non-Disclosure Controversy
Despite providing aggregate quantitative metrics, Bank of Baroda declined to reveal the specific identity or list of corporate borrowers whose debts over ₹100 crore were written off or settled with haircuts. The lender cited statutory exemptions under Section 8(1)(j) of the Right to Information Act, 2005, which safeguards third-party personal and commercial information from public disclosure.
This refusal has reignited widespread debate regarding transparency in public sector banking operations:
- Public Interest vs. Confidentiality: Governance advocates and shareholder groups argue that public sector banks handling taxpayer capital and retail deposits should maintain full transparency regarding large corporate defaults, especially when common retail defaulters are regularly named in public auction notices.
- Legal Distinction of Technical Write-Offs: Under Reserve Bank of India (RBI) guidelines, a technical or prudential write-off is an accounting mechanism to remove non-performing assets (NPAs) from active balance sheets to optimize tax liabilities and capital allocation. Legally, the borrower's liability remains intact, and recovery mechanisms via the Insolvency and Bankruptcy Code (IBC), Debt Recovery Tribunals (DRTs), and SARFAESI Act continue.
"While technical write-offs preserve legal recourse for recovery, the persistent disparity between written-off assets and actual realization underlines the systemic challenges facing post-default resolution in major public sector institutions," noted corporate legal analysts.
The disclosures come amid ongoing public calls for stricter legislative norms governing non-performing asset disclosures and public account accountability across state-owned commercial banks.