You are here: Home » Finance » News » Banks

Banks deny allegation that technical write-offs are a scam

Former RBI deputy governor K C Chakrabarty says technical write-offs should be stopped

Bankers have denied allegations that technical write-offs by banks are a “scam” as suggested by former Reserve Bank of India Deputy Governor K C Chakrabarty.

“Write-offs are done at the bank’s balance sheet level after it has been provided for. So, the process of recovery continues and the account remains alive, therefore I don’t think it is a scam,” said Arun Tiwari, chairman & managing director, Union Bank.

According to Reserve Bank of India guidelines, technical or prudential write-offs are the amount of non-performing loans that are outstanding in the books of the branches, but have been written off (fully or partially) at the head office level.

A public sector banker, who requested anonymity, said these write-offs are done as prudent measure and in accordance with the regulatory guidelines laid down and, therefore, cannot qualify as a “scam.”

Chakrabarty also added that banks usually don’t write off small ticket size loans.  

“Some big loans, such as agriculture loans, are written off first at times because they will be provided for by the interest rate subvention route, which may not happen in case of small loans,” said the banker.

image
Business Standard
177 22
Business Standard

Banks deny allegation that technical write-offs are a scam

Former RBI deputy governor K C Chakrabarty says technical write-offs should be stopped

BS Reporter  |  Mumbai 



K C Chakrabarty
K C Chakrabarty

Bankers have denied allegations that technical write-offs by banks are a “scam” as suggested by former Reserve Bank of India Deputy Governor K C Chakrabarty.

“Write-offs are done at the bank’s balance sheet level after it has been provided for. So, the process of recovery continues and the account remains alive, therefore I don’t think it is a scam,” said Arun Tiwari, chairman & managing director, Union Bank.

According to Reserve Bank of India guidelines, technical or prudential write-offs are the amount of non-performing loans that are outstanding in the books of the branches, but have been written off (fully or partially) at the head office level.

A public sector banker, who requested anonymity, said these write-offs are done as prudent measure and in accordance with the regulatory guidelines laid down and, therefore, cannot qualify as a “scam.”

Chakrabarty also added that banks usually don’t write off small ticket size loans.  

“Some big loans, such as agriculture loans, are written off first at times because they will be provided for by the interest rate subvention route, which may not happen in case of small loans,” said the banker.

RECOMMENDED FOR YOU

Banks deny allegation that technical write-offs are a scam

Former RBI deputy governor K C Chakrabarty says technical write-offs should be stopped

Former RBI deputy governor K C Chakrabarty says technical write-offs should be stopped Bankers have denied allegations that technical write-offs by banks are a “scam” as suggested by former Reserve Bank of India Deputy Governor K C Chakrabarty.

“Write-offs are done at the bank’s balance sheet level after it has been provided for. So, the process of recovery continues and the account remains alive, therefore I don’t think it is a scam,” said Arun Tiwari, chairman & managing director, Union Bank.

According to Reserve Bank of India guidelines, technical or prudential write-offs are the amount of non-performing loans that are outstanding in the books of the branches, but have been written off (fully or partially) at the head office level.

A public sector banker, who requested anonymity, said these write-offs are done as prudent measure and in accordance with the regulatory guidelines laid down and, therefore, cannot qualify as a “scam.”

Chakrabarty also added that banks usually don’t write off small ticket size loans.  

“Some big loans, such as agriculture loans, are written off first at times because they will be provided for by the interest rate subvention route, which may not happen in case of small loans,” said the banker.
image
Business Standard
177 22
Widgets Magazine

More News

Widgets Magazine
Widgets Magazine
Advertisement

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard