Essay on npa in indian banks


essay on npa in indian banks

recent years. You can reach him. The committee mandated the curbing of the particular issue because NPA direct towards credit risk that bank faces and its efficiency in allocating resources. Bank's assets are the loans and advances given to customers. Term lengths : The terms of bank chairpersons must be elongated in order to effect meaningful changes and to hold them accountable.

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Strengthening supervisory capacity : RBI lacks supervisory capacity to conduct forensic audits and this must be strengthened with human as well as technological resources. Retrieved January 09, 2017, from /chapter/2016/Chapter209.pdf Selvarajan., Vadivalagan. Figure 1: Gross and Net NPAs of Scheduled Commercial Banks. (For instance, SBI posted a loss of INR 24 billion in the last quarter on account NPA provisioning). Improvements to HR practices can help mitigate egregious behavior like frauds. In order to aid these sectors, Indian banks have been restructuring the advances provided through measures like interest rate reduction, extension of repayments etc., so as to bring back them to the normal state. Bankruptcy code will make it easier for banks to recover loans from unviable enterprises. The NPAs declined till 2006-07 but from 2006-07 there is an upward rise in NPAs. If the loan (installment / interest) diligence is the key to success essay is not paid for 2 crop seasons, it would be termed as a NPA. It means once the borrower has failed to make interest or principal payments for 90 days, the loan is considered to be a non-performing asset. Bankruptcy code should be passed as soon as possible. A major part of restructuring involves corporate debt restructuring.

By the same token, recapitalising PSBs repeatedly creates moral hazard issues. However, even the PSL sector has contributed substantially to the NPAs. Rotation of staff : The Punjab National Bank fraud demonstrates the extent of operational and risk management failures in PSBs.

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