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Non-performing loans in Indian banking sector to rise in next 12-18 months

  • Posted By
    10Pointer
  • Categories
    Economy
  • Published
    30th Nov, 2020

Reserve Bank of India defines NPAas any advance or loan that is overdue for more than 90 days.

What are Non-performing loans or assets?

  • Reserve Bank of India defines NPAas any advance or loan that is overdue for more than 90 days.
  • An asset becomes non-performing when it ceases to generate income for the bank.

Why it is getting increased?

  • Much of this is due to the six-month loan moratorium.
  • Supreme Court ruling barring banks from classifying any borrower as a non performing asset

What the banks are doing to curb it?

  • Banks are restructuring it.
  • Banks and non-bank financial companies (NBFCs) have also been strengthening their balance sheets and bolstering their equity bases.
  • Banks have also been building reserves and creating excess COVID provisions.

Verifying, please be patient.

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