Bank to Bankruptcy: The Quandaries of NPA

Geetha, E and Rao, Guruprasad and Shenoy, Sandeep S and Satish, Kumar (2017) Bank to Bankruptcy: The Quandaries of NPA. International Journal of Economic Research, 14 (15 (pa). pp. 525-534. ISSN 09729380

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Abstract

The present phase of the banking industry is under the charge of deteriorating asset performance. The declining profit and rising dead assets are the reasons for the deteriorated function of Indian Banking System. The state-run banks are more in numbers being charged by NPAs. The high-end officials, ministries, RBI, and the bankers have tossed many recommendations, and proposals to decode the jumbled bad loan issue. The scale of these bad loans seemed to be unstirred even by the countless efforts put by the officials. In 3 years of time, the Indian economy has witnessed a high peak in non-performing loans. The macro disturbances tampered the Indian Economy many times due to increasing consumer price index, corporate indebtedness (2011), prickled NPAs, economy slow down, etc. The crisis history started in 1997 with the Asian Financial Crisis to the Global Financial Crisis, 2008 all leading to the economy slow down and increase in defaulting loans. Banking is not just an act of accepting deposits yet to keep the economy functioning it is responsible for credit functioning as well. The Bankers have to filter out the amount of loan to be advanced to the customer based on certain criteria. Advances given to the borrowers is the most important asset of the bank. If these assets are blocked from generating income, the banking system will collapse gradually. After the demonetization period (2016), economy observed a huge amount of untracked cash flowing into the system, at the same time it is evident of the fact that industry needs to focus on its asset performance and its liquidity provisions. More the regulation, more the loopholes. Eventually, the need is to concentrate on the dismantling of the present functioning and to construct it according to the current market environment.

Item Type: Article
Uncontrolled Keywords: NPA, Public-Sector Banks, Asset Performance
Subjects: Departments at MU > Commerce
Depositing User: MIM User
Date Deposited: 10 Mar 2018 04:35
Last Modified: 12 Mar 2018 06:15
URI: http://eprints.manipal.edu/id/eprint/150744

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