Not all non-performing loans can be written off, but certain conditions must be met. The central government has strict legal procedures for loan write-offs. It must be determined through various efforts that possible non-performing loans have not been recovered or reduced and become non-performing loans.
There will be compensation when the loan is written off (the amount depends on the situation), so the main body of this loan is generally state-owned enterprises that enjoy the support of national policies. Write-off is not the bank's loss. Because write-off can wash away some dormant accounts, it will reduce the overall non-performing loan ratio of banks.
Extended data:
Loan write-off is the abbreviation of "write-off of non-performing loans", which is a system for banks to write off non-performing loans or loan losses according to regulations.
According to the relevant provisions of the Interim Provisions of the Ministry of Finance on the Establishment of Non-performing Loan Reserves of National Specialized Banks:
Each non-performing loan of less than 50 thousand yuan shall be examined and approved by the local bank in conjunction with the central financial institution at the same level;
Non-performing loans of more than 50,000 yuan and less than 654.38+10,000 yuan shall be examined and approved by provincial banks in conjunction with central financial institutions at the same level;
Each non-performing loan of more than 654.38+10,000 yuan shall be examined and approved by the head office of specialized banks according to the opinions of lower-level banks and provincial central financial institutions, and reported to the Ministry of Finance for the record.
In the specific implementation, the amount of approval has been adjusted. Banks and central financial institutions should strictly implement the relevant provisions of the state on loan write-off in the process of loan write-off, and must not approve beyond their authority or violate the relevant provisions, and offenders will be held accountable.
Not all non-performing loans can be written off, but certain conditions must be met. The central government has strict legal procedures for loan write-offs. It must be determined through various efforts that possible non-performing loans have not been recovered or reduced and become non-performing loans.
Bad debts are written off with profits, so it will reduce the bank's income in that year. However, the general banking regulatory bureau requires banks to have indicators of non-performing loan ratio. Therefore, banks must comprehensively consider profits and bad indicators to decide whether to write off. Under the current policy, bad records are not allowed to be eliminated, and the only way to eliminate them is to appeal through the People's Bank Credit Information Center. If verified, it can be eliminated.
Cancelled loan repayment:
If the bank has written off the loan, the bank may ask the court to continue to execute the borrower who has written off the loan. Article 26 of the Administrative Measures for the Write-off of Financial Bad Debts stipulates: "Finance must establish an asset preservation and recovery system after the write-off of bad debts. Except that the creditor's rights and debts or the relationship with the debtor have been completely terminated according to laws and regulations, Finance continues to reserve the right of recourse against the written-off bad debts, and continues to collect the written-off bad debts, off-balance-sheet interest receivable and accrued interest after write-off. "
Write-off of bad debts is only an internal accounting treatment of banks, which belongs to the "internal affairs" of banks. Under normal circumstances, it does not have the nature of foreign debt exemption, nor will it have the consequences of eliminating bad debts. After the bad debts are written off, the bank should actively collect all the principal and interest of the lender, instead of fulfilling the repayment obligation.