The Non performing Assets (NPA) level of Indian Banks are rising each passing Months. It has touched a level of 1,27,000 Crores during April ~December 2011. The main reason borrowers are not able to repay the loan is higher interest rate and Economic slow down. RBI has increased the interest rate continuously for one and half years. The Global slowdown has also impacted the Export based units heavily. At the end of March 2011 NPA was only INR 94000 Crores. In the priority sector lending NPA level has increased substantially as some section of farmers is intentionally defaulting loan hoping for loan waiver announcement by political parties in the coming years due to election. The aggressive marketing through which Banks had sold personal loan and consumer loan by compromising the KYC quality is also one of the reasons for high NPA in this segment. High NPA of any Bank is not good for any one as it is factored while pricing the interest cost.
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