A huge amount of Rs 1,14,182 crore was written-off in bad loans by public sector banks in the last three years as part of management of their non-performing assets (NPAs). This detail was shared in Lok Sabha.
“Banks resort to write-off only after exhausting all other possible avenues for recovery or when the asset coverage is not enough. However, the bank is required to adhere to the guidelines issued by RBI on write offs of loans and its Board approved policy. “The banks undertake write-off for Balance Sheet purposes i.E NPA management,” said Minister of State for Finance Jayant Sinha. Banks either make full provision as per the RBI guidelines or write-off advances and claims such tax benefits.
1. What is the meaning of NPA?
2. What is the full form of NPA?
Source: The Pioneer