RBI raises provisions on banks’ restructured loans to curb prevailing NPLs
Indian banks’ non-performing loan ratio grew to 3.1% in FY 2012, posing an increased threat to bank liquidity and profitability levels.
Indian banks deteriorating asset quality, as evidenced by a steady increase in non-performing loans (NPL) in recent times, can be attributed to the country’s economic slowdown and high interest rates over the past few years. Also, inadequate credit appraisal (from 2003 to 2007) of banks has also contributed to a rising NPL ratio – as it increased to 3.1% in FY 2012 from 2.25% in FY 2011.
Total bank loans in India amounted to $958 billion as of March 2012, growing…
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, Risk and Regulation
, Restructured Loans
, Credit Risk
, Liquidity Risk