Private sector banks wrote off about half of their bad loans in 2025-26 to cleanse the balance sheet primarily targeting the unrecovered unsecured loan exposure in the microfinance and consumer credit segments, people aware said. The Reserve Bank of India's financial stability report showed that the write-off ratio relative to non-performing assets for private banks was more than double that for public sector banks, although state-owned lenders accounted for 63.2% of the total bad loans.