Contents1 What is the News?2 What is the current procedure?3 What has changed now?4 Significance of this decision What is the News? The Reserve Bank of India(RBI) has permitted lenders to transfer the loans that have been classified as fraud to asset reconstruction companies(ARCs). What is the current procedure? Currently, RBI norms require banks to… Continue reading RBI permits lenders to sell fraud loans to ARCs, paves way for resolution
Tag: npa
Bad bank will help clean up balance sheets, but credit culture must change for healthier financial system
Synopsis: Issues and challenges that may impact the performance of the National Asset Reconstruction Company Ltd. Contents1 Introduction2 How the NARCL will function?3 How it will be beneficial?4 What are the issues and challenges involved?5 What is the way forward? Introduction The balance sheets of banks show stressed loans worth Rs 2 lakh crore. To… Continue reading Bad bank will help clean up balance sheets, but credit culture must change for healthier financial system
Government sets up ‘bad bank’ to clear the NPA mess
Contents1 What is the News?2 What is NARCL?3 What is India Debt Resolution Company Ltd (IDRCL)?4 How will the NARCL and IDRCL work? What is the News? Cabinet has cleared a ₹30,600-crore guarantee programme for securities to be issued by the National Asset Reconstruction Company Limited(NARCL) for taking over and resolving non-performing assets(NPAs). What is… Continue reading Government sets up ‘bad bank’ to clear the NPA mess
Union Cabinet clears decks for National Asset Reconstruction Company
What is the News? The Union Government has approved a proposal that requires the government to guarantee Security Receipts(SR) issued by National Asset Reconstruction Company Ltd (NARCL) when buying non-performing assets (NPAs) from banks. This will clear the path for the launch of National Asset Reconstruction Company (NARCL). Note: Security Receipts (SR) are issued by ARCs… Continue reading Union Cabinet clears decks for National Asset Reconstruction Company
Reserve Bank flags rising bad assets from Mudra loans
News:The Reserve Bank of India (RBI) has expressed concern over rising bad loans from Pradhan Mantri MUDRA Yojana(PMMY). Facts: About Rising Bad loans in MUDRA Yojana: The RBI Deputy Governor said that MUDRA was launched with the objective of lifting many beneficiaries out of poverty. However,there have been concerns at the growing level of non-performing… Continue reading Reserve Bank flags rising bad assets from Mudra loans
Govt. asks PSBs to find out reasons for rise in NPAs in last 5 years
The Finance Ministry has initiated a comprehensive consultative process with public sector banks(PSBs). The consultative process will start from branch level upwards to the State-level and then to the national level. The process aims to find out the reasons for the sharp rise in bad loans in the previous five years apart from outlining national… Continue reading Govt. asks PSBs to find out reasons for rise in NPAs in last 5 years
Banks’ bad loans down at 9.34 lakh crore at FY19-end
Finance minister has informed the Parliament that Gross non performing assets(NPA) of scheduled commercial banks has declined by Rs 1.02 lakh crore to Rs 9.34 lakh crore in 2018-19. Non-performing assets(NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. The decline in number… Continue reading Banks’ bad loans down at 9.34 lakh crore at FY19-end
Bank NPA
Union Minister of Finance informed Lok Sabha about the present state of Bank Non Performing assets(NPA) in India. The minister said that as per RBI provisional data on global operations, the aggregate amount of gross NPAs of Public sector banks(PSBs) and Scheduled Commercial Banks(SCBs) till 31st March,2019 were Rs.8 lakh crore and Rs. 9.5 lakh… Continue reading Bank NPA
MUDRA bad loans rise in FY19, even as NPAs decline across banking system
The government’s MUDRA scheme to finance small and micro borrowers has witnessed an increase in bad loans at a time when the system-wide non-performing assets(NPAs) have started showing signs of a decline. NPA is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. The NPAs… Continue reading MUDRA bad loans rise in FY19, even as NPAs decline across banking system
RBI now uses divergence to compel banks to improve their loan-loss ratios
Recently,three state-run banks had reported divergence in bad loan recognition while announcing the results. Divergence takes place when the Reserve Bank of India (RBI) finds that a lender has under-reported (or not reported at all) bad loans in a particular year and hence asks the lender to make disclosures if under-reporting is more than 10%… Continue reading RBI now uses divergence to compel banks to improve their loan-loss ratios
