RBI`s NPA guidelines proving to be boon for banking sector |
Reserve Bank of India`s stringent regulations directing banks to move non-performing assets or the NPAs recognition with the Insolvency and Bankruptcy Code (IBC) as the preferred route, has improved the credit culture and has also increased the recovery rates for the banks. This has majorly accounted to bringing down the fresh NPAs for the Indian banks. The stringent norms has brought forward the borrowers paying up for credit taken so that they do not fall into the category for the slightest of delays and force the banks to take action. State Bank of India has been the major beneficiary amongst the Indian banks, of this change in credit culture. The bank has witnessed a rise in recovery and upgrades this fiscal year, having a difference from last fiscal year, which is more than variables account for. According to analysts from PriceWaterhouseCoopers, the strict timelines under the RBI guidelines could be seen as harsh for many businesses as they go through ups and downs. But the situations under which these are formed, RBIs stand is justified. The stand taken by new RBI governor, Shaktikanta Das, no to bring any changes in the regulations, also gives confidence to the market.
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