Page 28 - Banking Finance June 2019

COVER STORY

ICE BERG OF

NPA IN

BANKING

INDUSTRY

PAs have become a big demon and challenge for When gigantic ice pieces break off from glaciers, a large
N the survival of banking industry. The cause of iceberg is born. These travel with ocean currents, and the

concern for the nation is the rising trend in NPAs
beauty and the beast of these iceberg is that about 90% of
which is spreading like an epidemic. Unless this
trend is contained and curtailed, the fear is, failing or slowing an iceberg is below the water line and just one-tenth of the
volume of an iceberg is above the water which can be seen
down of economy. and the below water line portion is difficult to judge by
looking at the portion above the surface.
As we see the figures of NPA that is equal to iceberg that
float in an ocean. That iceberg has the intensity to break This way the iceberg can be compared with the banks' NPAs.
and demolish a ship. Nobody can forget the RMS Titanic, The ships of banks are colliding with heck and the damages
the British passenger liner that sank in the North Atlantic are so magnanimous as just even further we are not able
near Newfoundland in the early hours of 15 April 1912, killing to calculate what the next damages are. Indian central bank
thousands of passengers and crew after it collided with an (RBI) with its Asset Quality Review ( AQR) still searching and
iceberg. figuring out NPA's scenario in Indian banks and we still do
not know whether the worst is behind us or it will heal
these damages.
About the author
Sachin Bansal Iceberg principle
Senior Manager
"Observation that in many (if not most) cases only a very
Faculty at Staff College
small amount (the 'tip') of information is available or visible
Union Bank of India, Bangalore
about a situation or phenomenon, whereas the 'real'

28 | 2019 | JUNE | BANKING FINANCE