Q. Consider the following statements:
1.A bank can reduce the level of non-performing assets by writing off loans.
2.Writing off loan is an action taken by lender whereas loan waive off can only be done by the government.
3.The writing off loans of private sector bank is higher than the public sector banks in India.
Which of the statement given above are correct?
Answer: A
Notes:
Statement 1: A bank can reduce the level of non-performing assets by writing off loans.
Statement 2: Writing off loan is an action taken by lender (Banks) whereas loan waive off can only be done by the government (like waving farmers loan due to crop failure or other reasons).
Statement 3: The statement is incorrect. The writing off loans of public sector bank is higher than the private sector banks in India. Private banks wrote off loans worth Rs 2.7 lakh crore in the last five years which is 27.28% of the total write-off of the last five years. On the other hand, Public sector banks reported write-offs at Rs 734,738 crore accounting for 72.78% of the total write-off.
Source: ForumIAS
