Bank write-off usually refers to bank loan write-off, which is to write off the loan after review. Usually when a loan has not been repaid, and the bank's write-off department determines that it is indeed impossible to recover the remaining loan principal and interest, the loan will be stripped to the bank's asset disposal center instead of being continued by the handling bank. Going to the borrower to collect payment is called a write-off.

Not every bad loan can be written off, it must meet certain conditions. The central government has strict legal procedures for loan write-off. It must be a non-performing loan that has been determined to have no possibility of recovery or reduction after various efforts and has become a bad debt.

When the loan is written off, a certain amount of compensation will be given (the amount depends on the situation). Therefore, the subjects of such loans are generally state-owned enterprises that enjoy the support of national policies. A write-off is not a loss to the bank. Because write-offs can wash away some dead debts and reduce the bank's overall non-performing loan ratio.

Extended information:

Loan write-off is the abbreviation of "bad loan write-off". It is a system in which banks write off bad debt loans or loan losses in accordance with regulations.

According to the relevant provisions of the Ministry of Finance's "Interim Provisions on the Establishment of Loan Bad Debt Provisions by National Specialized Banks":

If the amount of each bad debt loan is less than 50,000 yuan, local banks shall jointly The central financial institution at the same level shall conduct examination and approval;

If the amount of each bad debt loan exceeds 50,000 yuan and is less than 100,000 yuan, the provincial bank shall conduct examination and approval together with the central financial institution at the same level;

Bad debt loans with an amount of more than 100,000 yuan each shall be approved by the head offices of each specialized bank based on the opinions of lower-level banks and provincial central financial institutions, and reported to the Ministry of Finance for filing.

In the specific implementation, the approval amount has been adjusted. All banks and central financial institutions must strictly implement the relevant national loan write-off regulations during the loan write-off review and approval process, and shall not exceed their authority or violate relevant regulations for review and approval. Violators will be held accountable accordingly.

Not every bad loan can be written off, it must meet certain conditions. The central government has strict legal procedures for loan write-off. It must be a non-performing loan that has been determined to have no possibility of recovery or reduction after various efforts and has become a bad debt.

The write-off of bad debts is written off using profits, so it will reduce the bank's income for the year. However, the Banking Regulatory Bureau generally has non-performing loan ratio index requirements for banks, so each bank must consider profits comprehensively. and bad indicators to decide whether to write off. Under the current policy, bad records are not allowed to be eliminated. The only way to eliminate them is to appeal through the Credit Reference Center of the People's Bank of China. If verified, they can be eliminated.

Repayment of written-off loans:

For loans that have been written off by the bank, the bank can ask the court to continue execution of the borrower's loan that has been written off. Article 26 of the "Measures for the Administration of Write-off of Financial Bad Debts" stipulates: "Finance must establish an asset preservation and recovery system after the write-off of bad debts. Except where laws and regulations stipulate that the creditor's rights and debts or the relationship with the party have been completely terminated, financial services must We will continue to retain the right to pursue the written-off bad debts, and continue to collect the written-off bad debts, loan off-balance sheet interest receivable and accrued interest after writing-off, etc."

The write-off of bad debt claims is only an internal accounting treatment of the bank and is an "internal matter" of the bank. Generally, it does not have the nature of exempting external debts and does not have the consequences of the physical elimination of bad debt claims. After the bad debt claims are written off, the bank does not exempt the lender from its repayment obligations. Instead, it must proactively collect all principal and interest.