Are we on the right
track for NPA resolution?
B. Yerram Raju*
In the last few years,
barring the 2008 Recession and its global impact, no subject other than NPAs of
the Indian Banks has occupied so much print space and media attention.
If good number of banks
in the public sector has faltered in loan origination succumbing to external
pressures, some others have failed to supervise their loan portfolio. But their
contribution to NPA portfolio may not be more than 25 percent. NPAs that turn
as bad loans are the real culprits. Only 20 percent of the total quantum of
loans at the doorsteps of legal system could be resolved to the satisfaction of
the banks, notwithstanding the projected empowerment of banks through the
SARFAESI Act. The real reason is, therefore, beyond banks – the law and
justice.
