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ARTICLE · 31 AUGUST 2017

The NPA Crackdown - An Endless Battle

Deloitte
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The upward rise in non-performing assets (NPAs) has placed the Indian banking and financial services sector in jeopardy, and the writing on the wall is that the situation may not get any better...

IndiaFinance and Banking
KV Karthik
KV Karthik
Nishkam Ojha
Nishkam Ojha

The upward rise in non-performing assets (NPAs) has placed the Indian banking and financial services sector in jeopardy, and the writing on the wall is that the situation may not get any better in the near term. However, regulators are making efforts towards ensuring that such high NPAs levels do not appear in the future.

RBI's stance on rising NPAs

The regulator has frequently raised concerns over the rising trend in loan related frauds in the financial sector. The key issues identified by the RBI (Reserve Bank of India) were:

  • An unusually long time for fraud detection
  • Delay in reporting of frauds to the RBI which further delays alerting other banks by the RBI, and,
  • Timely initiation of staff accountability proceedings.

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