Page 43 - BANKING FINANCE NOVEMBER 2023
P. 43

ARTICLE






         AN OPEN CALL BY



         RBI FOR BANK'S TO



         SETTLE OUT




         "WILFUL DEFAULTS"




         Based on recent guidelines issued by the
         Reserve Bank of India on Wilful
         Defaulters-








         I    f businesses in an economy are enticed to lose money  Italy (16.35%), Portugal (15.52%), and Ireland (11.85%) have


                                                              a worse NPAs scenario than India.
              at a bank's cost rather than make money, a financial
              abyss may emerge. The Indian banking industry in
              recent past has got one of the highest percentages of
                                                              System, the NPA position is under little control as per recent
         loan assets classified as non-performing assets (NPAs). There  Gradually with lot of efforts from all corners of Financial
         was a time, when India was listed as having the fifth-highest  RBIs data. Scheduled commercial banks' net non-performing
         level of non-performing assets (NPAs) in a report by CARE  assets (NPA) ratio fell to a 10-year low of 3.9 per cent in
         Ratings of 2020. The referred report divided the world's  March 2023, the Reserve Bank of India noted in the latest
         nations into four groups: those with very low levels of NPAs,  edition of its Financial Stability Report. The public sector
         those with low levels of NPAs, those with medium levels of  banks' financial situation has significantly improved, with
         NPAs, and those with high levels of NPAs. India has been  profits being recorded on a consistent basis and the
         categorised as having "high levels of NPAs" and is in category  Insolvency and Bankruptcy Board of India (IBBI) moving
         4 with an NPA ratio of 9.85 percent. Only Greece (36.67%),  quickly to resolve or liquidate their non-performing assets
                                                              (NPAs). The government has also been giving the PSBs with
                                About the author              sufficient budgetary support to maintain their sound
                                                              capitalization, ensuring that their Capital Risk-Weighted
                          A. K. Agnihotri                     Adjusted Ratio (CRAR) stays comfortably over the threshold
                          Chief Manager (Faculty)             levels of adequacy.
                          Union Learning Academy -
                          Credit & Policy                     Now coming to the focal point of this article, the Reserve
                          Union Bank of India
                                                              Bank of India (RBI) has recently issued the "Framework for

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