business
Loan write-offs vs loan waivers: The difference
Jan 13, 02:01

When banks remove bad loans from their books of accounts it is called a loan write-off. Banks continue their efforts to recover the bad loan. Banks voluntarily do this to clean their balance sheets, avail tax benefits and optimise the use of capital. This does not mean that this debt is forgiven. In loan waivers, the borrower doesn't have to repay the loan. This happens usually when the government agrees to compensate banks. That doesn't mean that write-offs are to be condoned. The increasing amount of write-offs over the past decade shows banks' struggles with non-performing loans.

loan write off gfx Jan 13