Friday, May 7, 2021
Home Fact-Check Bollywood entertainer Richa Chadha wants RBI to ‘write off’ everyone’s EMI. Here is why...

Bollywood entertainer Richa Chadha wants RBI to ‘write off’ everyone’s EMI. Here is why it is not possible, ever

The banks usually write off loans (an asset to the bank) given to borrowers, which have now shown signs of weakness. The borrower is still liable for repayment.

There have been countless occasions when Bollywood actors have made a fool of themselves by weighing in on topics completely out of their intellectual grasp. Recently, actor Richa Chadha enlisted herself in the list of Bollywood celebrities who have displayed shocking disregard and brazen antipathy for logic and rationality. As the country reels under the economic shadow of coronavirus lockdown, Ms Chadha today asked the Premier Bank of the country, RBI, why it can’t “write-off” everyone’s EMI.

Taking to Twitter, Ms Chadha asked, “Why can’t the RBI also write off everyone’s EMIs?” The tweet by the Fukrey actor was in reference to the RBI list of top 50 wilful defaulters who are accused of cheating Indian banks. However, the Masaan actress seemed to have conflated the two disparate concepts of “waive off” and “write off” to wonder why the RBI cannot write off everyone’s EMIs.

It is also pertinent to note here that the Reserve Bank of India doesn’t write off loans. It is the banks that write off the loans that are granted by them. In this case, the apex bank of the country had simply provided with the list of top 50 defaulters to an RTI query. Therefore, Ms Chadha’s demand that the RBI should write off everyone’s EMIs is patently wrong and impossible to be fulfilled.

Difference between a Waive off and Write off

‘Write-off’ is a process of balance sheet cleaning up exercise undertaken by concerned banks to depict the real status of the bank’s assets and liabilities. The write-offs are not loan waivers as implied by Ms Chadha in her above tweet.

The banks usually write off loans (an asset to the bank) given to borrowers, which have now shown signs of weakness. The borrower is still liable for repayment. If banks fail to write-off these loans, it is reflected as a high-quality asset and the returns-on-assets should be classified as an income to the bank. However, the quality of a defaulted loan has deteriorated for some time now, which results in giving the wrong picture of the true assets of the bank. It is just a normal practise to clean balance sheets and achieve tax efficiency.

Write-offs are a purely technical, accounting entry. Loans, which may not be repaid by the borrower in the normal course of business are written off. Even when these loans are written off, various recovery procedures like recovery suits filed before the Debt Recovery Tribunal and action initiated under SARFAESI Act continue. Hence, the writing-off a loan is not simply a ‘waive-off’.

Waive off, on the other hand, means that the banks have no means for recovery. For example, loans of farmers who face crop failures are waived off which means they don’t have to repay the loans.

India’s FM Nirmala Sitharaman slammed Congress leader Rahul Gandhi over misinformation

Earlier yesterday, the Reserve Bank of India had released the list of top 50 loan defaulters which included names of Mehul Choksi, Nirav Modi among others. The former Congress President lapped on to the list to mount an attack against the government, accusing them of waiving off their loans. However, the Finance Minister of the country, Nirmala Sitharaman rubbished the unfounded claims made by the Gandhi scion, stating that the Wayanad MP is spreading misinformation again by terming ‘bad loan write off’ by banks as ‘loan waiver’.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

Related Articles

Trending now

Meet AAP’s ‘Delhi ke Nirmata’: Who is Navneet Kalra, the businessman on the run after oxygen hoarding scandal was busted

Oxygen Concentrators have been found at Khan Chacha, Nege & Ju bar and Town Hall restaurants in Delhi, all owned by Navneet Karla

USA: Separatist group ‘Black Hammer’ acquires 200 acres of Colorado Land to create independent Communist city

Radical anti-Semite, anti-white group collects about $65,000 to establish a communist utopia on a Colorado mountain top.

This only hurts nation: Several CMs, including YS Jagan Mohan Reddy slam UPA’s Jharkhand CM for petty politics over call by PM Modi

Jharkhand CM Hemant Soren took potshots at PM Modi, after he called to inquire about ongoing Coronavirus pandemic in the State

Delhi’s Covid black marketing: Day after 419 oxygen concentrators were recovered, 96 more recovered from Khan Market restaurant

The Delhi Police has recovered 96 oxygen concentrators from one Khan Chacha restaurant at Khan Market in Delhi.

Rahul Gandhi attacks construction of new parliament as ‘wastage’ while his Maharashtra govt is spending 900 crores on MLA residences

Ever since the much-needed ambitious project was launched by the Modi government, Rahul Gandhi and his Congress party have been indulging in politicising the issue by asking the government to shelve its plans on the central vista project.

Left-leaning Twitter and ISIS seem to have the same threads of fascism that bind them: Here is how

After the political upset for BJP, Mamata Banerjee took the reigns and a spate of unimaginable violence was unleashed on those who worked for BJP or those who had supported the party in the state.

Recently Popular

Comedian Sanket Bhosale who had featured in ad mocking Rahul Gandhi booked for violating Covid-19 norms in Punjab

A week after the vandalism by the Congress workers in Mumbai, the Congress-led Punjab government has now booked comedian Sanket Bhosale, the actor featured in the advertisement, on the pretext of violating Covid-19 regulations during his wedding.

Cricketer Irfan Pathan accused of extra-marital affair with cousin sister, girl’s in-laws allege fake dowry case

According husband of the woman, the relationship between his wife and Irfan Pathan goes back a long time ago and continues even now

21-year-old college student raped and murdered in Medinipur district in West Bengal, 3 including a woman arrested

West Bengal police arrested 2 masons and their female aide for rape and murder of a college student, who have confessed to the crime

Scroll journalist mischievously shares misleading, old report to insinuate that union govt is funding a trial of using Gayatri Mantra to treat Covid-19

While AIIMS Rishikesh is testing using gayatri mantra along with usual treatment for Covid-19, fake news claims it as standalone treatment

Aam Aadmi Party’s Raghav Chadha defies logic while giving calculations on cryogenic tanks and medical oxygen

One feels that if Aam Aadmi Party leaders focus on resolving the oxygen crisis instead of overusing their tiny brain for absurd calculations, they could perhaps save a few lives.

‘Out of control’ Chinese rocket falling back on Earth and no one knows where it is going to crash: Details

After launching space station hub, China's Long March 5B is doing 27,600km/h in failing orbit, with eventual crash site unknown.
- Advertisement -

 

Connect with us

254,802FansLike
538,981FollowersFollow
24,300SubscribersSubscribe