On 28th April, Deputy Editor of The Hindu, Vijaita Singh, got confused between “written-off” and “waived-off” loans. In a post on social media platform X (formerly Twitter), Vijaita Singh targeted banks for auctioning off properties of the loan defaulters and asserted that such actions were being taken while corporate loans were “written-off”. Though she wrote “written-off”, it was clear that The Hindu’s deputy editor does not know the difference between waiving-off loans and writing-off loans.
She wrote, “While corporate loans are written off, homes and land of middle-class people who default on loans are attached and auctioned by banks. List of properties to be auctioned by Canara Bank in Bihar.”
While corporate loans are written off, homes and land of middle class people who default on loans are attached and auctioned by banks. List of properties to be auctioned by Canara Bank in Bihar 👇 pic.twitter.com/FcFIVQ40u6
— Vijaita Singh (@vijaita) April 28, 2024
She also shared a photograph of The Indian Express’s 28th April issue where auction notices were published. The pending amount of the loans that were not paid varied between Rs 4 lakhs and a little over 1 crore.
It has been years since Vijaita has been confused about the two terms. In November 2016, a week after demonetisation, she wrote on Twitter (now X), “While you and me prove our patriotism by standing in queues, SBI writes off loan of wilful defaulters,Vijay Malya’s 1201 cr loan waived off!”
While you and me prove our patriotism by standing in queues,SBI writes off loan of wilful defaulters,Vijay Malya's 1201 cr loan waived off! https://t.co/qGBLrATqtQ
— Vijaita Singh (@vijaita) November 16, 2016
However, a little research of her timeline revealed an interesting fact. Vijaita Singh appears to be well-informed about the usage of terms “waived-off” and “written-off”. Interestingly, in 2019, she quoted a report in The Hindu and wrote, “Despite spending over ₹19,000 crore on farm loan waiver, a total of 12,021 farmers have died in the State due to suicide between 2015 and 2018, the Maharashtra government said in Assembly on Friday.”
Despite spending over ₹19,000 crore on farm loan waiver, a total of 12,021 farmers have died in the State due to suicide between 2015 and 2018, the Maharashtra government said in Assembly on Friday @alokdesh rprts https://t.co/5qJuj23ipn
— Vijaita Singh (@vijaita) June 22, 2019
Contradictory understanding of terms on the timeline of Vijaita Singh on social media
Using the correct terminology indicates Vijaita Singh understands the difference. Then what could be the reason behind the misleading post she made on X on 28th April? Sensationalisation of reporting? Ethics of journalism categorically oppose the sensationalisation of media reporting as it can have adverse effects on the public and may manipulate the truth. This is exactly what has happened here. In journalism, the sensationalisation of a topic is an editorial tactic to draw the attention of the viewers and has the potential to mislead people.
Difference between write-off and waive-off
The ‘write-off’ is a process of balance sheet cleaning up exercise undertaken by banks to depict the real status of the bank’s assets and liabilities. The write-offs are not loan waivers as claimed by Rahul Gandhi. The banks usually write off loans (an asset to the bank) given to borrowers, which have now shown signs of weakness.
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.
Secondly, if a loan is not written-off and is continued as a healthy asset at a time when it actually is a Non-Performing Asset (NPA), then banks can continue to book interest income on the loan, on the accrual basis of accounting.
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’.
In addition to these differences, not all the loans that are being restructured by ‘writing-off’ are provisioned during the current regime this year. The scheduled commercial banks have in the past, also in the current fiscal, may have written-off loans that are given by the banks in the UPA era. Loans writing-off is a normal banking operation, that is continuously undertaken every fiscal year by the banks to clean their balance sheet for accounting tax-related issues.
Banks recovered over Rs 10 lakh crores from bad loans in nine years
In July 2023, Finance Ministry informed Lok Sabha that between fiscal years 2014 to 2023, scheduled commercial banks recovered around Rs 10 lakh crores of NPAs or bad loans. The information by the Finance Ministry was provided in Lok Sabha as a response to an unstarred question by MP Gnanthiraviam S and MP Vijaykumar alias Vijay Vasanth.
Minister of State for Finance Bhagwat Kisanrao Karad stated that according to the Central Repository of Information on Large Credits (CRILC) data, the amount owed by scheduled commercial banks (SCBs) to corporate company borrowers who are classified as non-performing assets (NPA) and have an outstanding amount of Rs 1,000 crore or more was Rs 1,03,975 crore as of March 31, 2023.
It is evident that though it is a slow process under which the commercial banks recover loans but the recovery was on track. Interestingly, it was reported in February 2022 that Rs 18,000 crores were recovered from fugitives Vijay Mallya, Nirav Modi and Mehul Choksi. All these loans were NPAs and despite them being outside India, the recovery process continued.
By the time this report was published, Vijaita had not corrected herself or written any follow-up comment.
