Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:
- Mr.Taron Mohan, CEO & Promoter, NextGen Telesolutions Pvt Ltd
- Mr. P D Singh, Former General Manager, Bank of Baroda
- Mr. SK Datta, Former Advisor & Chief General Manager, Bank of India
- Mr. Abhishek Arun, Senior Vice President, Paytm
- Mr. Rahul Dayal, Head- Information Technology, Aditya Birla Sun Life Mutual Fund
- Mr. Narayan Rao, Chief Services Officer, Suryoday Small Finance Bank
- Ms. Priyanka Subhadarsini, Payments Business Analyst, Standard Chartered GBS
- Mr. Manish Jain, Manager – Software Engineer, Amazon
- Mr. Abhishek Mody, Associate Director-Payment & Digital Initiatives, IDFC Bank
- Mr. Avro Mukerji, Investment Counselor- NRI Burgundy, Axis Bank
- Mr. Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
- Many CEO/CXO Bankers & Fintech professionals and Founders on FIAKS Forum who participated in the discussions had requested to remain anonymous
Following are the headlines around which FIAKS community discussions rolled:
- Axis bank has written off 12,274 crores
- Bank of Baroda has written off 10,308 crores
Upon this FIAKS community put forth a view that here the money lost is of taxpayers and shareholders, not PE or VC investors. Imagine if this money was invested in the start-ups then the kind of innovation and employment it could have generated.
Firstly, let’s understand more about these write-offs:
- A crucial question that comes up is – How do banks justify/accommodate write-offs aside from the provision of bad debts as a line item in books of accounts?
- Any write-off requires board approval and has to be justified as to why there is no chance of recovery. Thereafter, recovery efforts continue and in case any amount is received, it is accounted as Other Income.
- Write-offs are expensed out so to that extent profit before tax is less and therefore tax benefit accrues. Much of these write-offs are prudential write-offs, which means that the accounts are written off from the books as a tax-saving measure. Banks do not forfeit their recourse to the borrowers for recovery, which goes on in a normal manner. Any recovery made thereafter goes straight into the Bank’s P&L.
- A prudential write off is not done because of the non-recoverability of the loan from the borrower. Nevertheless, it is a charge to the Bank’s P&L.
- In the case of banks, it’s taxpayers/shareholders money going to a few that the bank decides to write off. It’s all unknown until it’s so late that it’s written off and banks itself bleed.
So why doesn’t the government allow these banks to fail who keep talking about trust? Register and Read the full article