“Written off does not mean maafi…. It doesn’t mean that the loan ceases to be a loan. We will still chase the loan, the entry in the book changes from being a performing asset to a non-performing asset.”
-Finance Miniter, Shri Arun Jaitley
Write-offs are a very common tool to clean up bank balance sheets around the world. It does not mean Vijay Mallya or anyone else for that matter is off the hook. Earlier this year, China’s top four banks wrote off 130.3 billion yuan (equivalent to 19.5 billion dollars) of bad loans for the first half of the year. It was an increment of 44 percent from the previous year. Moreover, from fiscal 2011 to fiscal 2015, India’s banking industry also wrote off a cumulative Rs 1.76 trillion worth of loans.