NPA and Banking Sector in India essay for Class 9, 10, 11, 12 and College students. Find a paragraph, long and short essay on NPA and Banking Sector in India for Students.
NPA and Banking Sector in India Essay for Students
NPA and Banking Sector in India Essay 300 Words
A nonperforming asset (NPA) refers to a classification for loans on the books of financial institutions that are in default on scheduled payments of principal or interest i.e mostly within 90 days. The problem of NPAs in the Indian baking system is one of the most formidable problems that had its impact on the entire banking system. Higher NPA ration trembles the confidence of investors, depositors, lenders etc.
NPAs – The gross non-performing assets of all the banks in the country amounted to Rs 8,41,958 crore in January, led by industry loans followed by services and agriculture sectors. Almost 6 lakh crore from Industry and 70000 crores from agriculture. Highest NPA is led by Public Sector Banks – SBI, PNB, IDBI bank etc. There are as many as 8,457 crores pending in the National Company Law Tribunal to recover loans from defaulters. Well known defaulters like Nirav Modi, Vijay Mallya, etc
Reserve Bank has issued a Prompt Corrective Action (PCA) framework to maintain the sound financial health of banks. Right amendment in banking law to give RBI more powers. Under New Insolvency and Bankruptcy Code, cases of 12 major defaulters under NCLT. Independent borrower background checks to enhance internal skill sets on credit assessment/evaluation. Stress on the importance of mandating forensic audit to check borrower intent.
While the rate of growth in NPAs is showing signs of slowing down, the overall problem is still far from any sort of quick resolution. Only honest business persons should be able to access loans from strong and reformed banks. Recapitalisation to increase credit off-take and creation of jobs. NPA resolution is very important for the healthy growth of the Indian economy.
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