Loan Write-off

Recent data from the Reserve Bank of India shows that banks wrote off more than Rs. 10 lakh crore in loans over the last five years.

Banks recovered only Rs 1.32 lakh cr from write-offs in 5 years ending March 2022.

About Loan Write-off

  • A loan write-off is a tool used by banks to clean up their balance-sheets. It is applied in the cases of bad loans or non-performing assets (NPA).
  • If a loan turns bad on the account of the repayment defaults for at least three consecutive quarters, the exposure (loan) can be written off.
  • Once a loan is written off ....
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