Not all non-performing loans can be written off, and certain conditions must be met. It must be a non-performing loan that has not been recovered or reduced through various efforts and has become a bad debt.
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.
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According to Japan's experience, China's economy is also dragged down by non-performing loans like Japan. More and more people have seen the harmfulness of non-performing assets.
1, the non-performing loan ratio is high, and the biggest harm is to affect the ability of banks to support the economy. Banks in China are extremely cautious about lending, because there are too many non-performing loans, which affect their lending ability.
2. If the problem of non-performing loans is solved by issuing base currency, it will easily lead to inflation. If we take it lightly, a large number of non-performing loans will also induce social moral hazard. If we strengthen the efforts to deal with non-performing loans, it may lead to chain bankruptcy of enterprises and increase financial risks and social crises.
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