Many people, including intellectuals and pseudo-intellectuals, still publicise “writing off’ of corporate loans, as if the lenders have forgiven the loans. Surprisingly, they do not know the term write-off is only a misleading argument. It is no more freedom for the borrowers to sit without the liability of repaying it. Every borrower will have to repay their loans even if the banks write off the loan from their books.\u00a0<\/span><\/p>\u00a0<\/span><\/p>Writing off doesn’t mean forgiving the defaulters’ loan by a lender. No bank has ever forgiven any corporate loan. It is only a technical term used in the accounting of commercial banks for recalibration of non-performing assets (NPA) to save tax, after making full provision against the NPA. This practice is done since prudential norms came into existence many years ago. From the books of banks, such accounts are usually separated to keep under an account head called Advanced Under Collection Accounts (AUCA). The written-off amount is parked under this head.<\/span><\/p>\u00a0<\/span><\/p>\u00a0<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t