Definition: Loan write-off is the abbreviation of "bad debt write-off", which is a system for banks to write off non-performing loans or loan losses according to regulations.
Two. Conditions for write-off: According to the relevant provisions of the Interim Provisions on Establishing Non-performing Loan Reserves of National Specialized Banks issued by the Ministry of Finance:
1. If the amount of each non-performing loan is less than 50,000 yuan, it shall be examined and approved by the local bank in conjunction with the central financial institution at the same level;
2. The amount of non-performing loans is more than 50,000 yuan and less than 65,438+10,000 yuan, which shall be examined and approved by the provincial banks in conjunction with the central financial institutions at the same level;
3. Each non-performing loan exceeding RMB 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.
Third, others:
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.
Non-performing loans refer to overdue loans, sluggish loans and non-performing loans. Overdue loans refer to loans that cannot be repaid when the loan contract expires (including after the extension). Sluggish loans refer to loans that are overdue (including after extension) and have not been repaid, or loans that are not overdue or overdue but have terminated production and operation and stopped project construction; Non-performing loans are loans classified as non-performing loans according to relevant regulations. Non-performing loans indicate that banks will suffer risk losses. Minimizing non-performing loans is the primary goal of risk management of commercial banks.
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.