{"id":27481,"date":"2018-10-23T14:20:31","date_gmt":"2018-10-23T08:50:31","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=27481"},"modified":"2018-10-23T14:20:31","modified_gmt":"2018-10-23T08:50:31","slug":"non-performing-assets-when-and-how-did-banks-pile-up-such-bad-loans","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/non-performing-assets-when-and-how-did-banks-pile-up-such-bad-loans\/","title":{"rendered":"Non-Performing Assets: When and how did banks pile up such bad loans?"},"content":{"rendered":"<p><a href=\"https:\/\/indianexpress.com\/article\/explained\/india-economy-gdp-growth-rate-loans-npas-rbi-5355342\/lite\/\">Non-Performing Assets: When and how did banks pile up such bad loans?<\/a><\/p>\n<p><strong><u>News<\/u><\/strong><\/p>\n<ol>\n<li>The causes which led to NPA (non performing asset) and its present impact<\/li>\n<\/ol>\n<p><strong><u>Important facts<\/u><\/strong><\/p>\n<p><u>2.Impact of NPA<\/u><\/p>\n<ul>\n<li>Current account deficit widened by 2.4%.<\/li>\n<li>Rupee lost its value by 13% till now.<\/li>\n<\/ul>\n<p><u>3.India\u2019s position till 2008<\/u><\/p>\n<ul>\n<li>Increase in Capital flow in India from $17billion in 2003-04 to $107.9 billion in 2007-08.<\/li>\n<li>RBI intervened by purchasing dollar, which increased liquidity in Indian market, which was for favoring exporters.<\/li>\n<li>This led to high liquidity within Indian banks.<\/li>\n<\/ul>\n<p><u>4.Trinity problem<\/u><\/p>\n<ul>\n<li>According to <strong>flemming model<\/strong> India was facing a trinity problem which holds that country cannot manage the three at the same time.\n<ul>\n<li>Monetary policy autonomy<\/li>\n<li>A fixed exchange rate<\/li>\n<li>Free capital movement<\/li>\n<\/ul>\n<\/li>\n<li>One has to choose any two out of three available options.<\/li>\n<li>However a developing country like India wants capital for development, exchange rate that favors Exports and independent monetary policy to check inflation.<\/li>\n<\/ul>\n<p><u>5.Lending by banks<\/u><\/p>\n<ul>\n<li>High liquidity in banking sector and expected bright prospects in future led banks to give unprecedented lending to investors during 2004 to 2008, which was 30% more in comparison to 2001<\/li>\n<\/ul>\n<p><u>6.Global crisis and NPA<\/u><\/p>\n<ul>\n<li>Collapse of Lehman brother in US led to the global financial crisis in 2008 and slowdown of Indian economy<\/li>\n<li>This led to increase in NPA from 2.83 lakh crore in 2014 to around 12 lakh crore in 2018<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Non-Performing Assets: When and how did banks pile up such bad loans? News The causes which led to NPA (non performing asset) and its present impact Important facts 2.Impact of NPA Current account deficit widened by 2.4%. Rupee lost its value by 13% till now. 3.India\u2019s position till 2008 Increase in Capital flow in India&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/non-performing-assets-when-and-how-did-banks-pile-up-such-bad-loans\/\">Continue reading <span class=\"screen-reader-text\">Non-Performing Assets: When and how did banks pile up such bad loans?<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[555],"tags":[],"class_list":["post-27481","post","type-post","status-publish","format-standard","hentry","category-test-1","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27481","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=27481"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/27481\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=27481"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=27481"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=27481"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}