Ref. No. 41/897
In the name of Allah the most Gracious the most Merciful
The answer to your question is as follows:
(1) As long as you expect the money given as debt to return to you, you have to include lent money into your total asset and pay zakat. When you lost your hope to get it back, you are not obliged to pay the lent money’s zakat, but you can wait and whenever you get back your money, pay the zakat of the previous years too which passed on that amount. (2) The interest received from bank cannot be given in its service charges. It must be given to poor and needy people without the intention of reward as you have been doing for many years.
And Allah knows best
Darul Uloom Waqf Deoband