Important Topics for SBI PO GD: NPA Menace in India
SBI is going to conduct the Group Discussion and Personal Interview, so all of you must be searching for the relevant stuffs for the same. For boosting your preparation for the SBI PO GD & PI, we have already provided you with the Group Discussion Topics and now we are providing you with the materials on the GD topic. It will be definitely fruitful for your preparation. Make most of it.
Today, we are providing “NPA Menace in India” under the title Important Topics for SBI PO GD.
Menace of ‘NPA‘ in India
The non-performing assets (NPAs) in the Indian banking system have become a big concern – posing a threat to the stability of the country’s financial system and the economy. In the recent CARE Ratings, India has been ranked fifth on the list of countries with the highest NPAs.
NPA in terms of RBI regulations result out of non-payment of interest for a period of 90 days or non-payment of principle amount for 90 days or more. So beyond that point, it is called Non-Performing Asset.
The problem name NPA is not of recent origin. Few years back, India suffered from a huge infrastructure gap and the banking sector was encouraged to get themselves into a lending spree for companies willing to undertake various projects. Public Sector Banks were actually pushed to provide loans for projects that were floated largely by the private sector.
Some of the main reasons for this are prolonged downturn in the world economy, falling commodity prices, lack of due diligence and adherence to rules.
Some of the measures taken to tackle NPAs are establishment of DRT, ARCs and BBB, also implementation of SARFAESI act, Mission IndraDhanush and PCA norms and the most recent IBC. Concept of Bad Banks is also in the pipe line.
The need of the hour to tackle NPAs is some urgent remedial measures. This should include technology and data analytics to identify the early warning signals, mechanism to identify the hidden NPAs, development of internal skills for credit assessment and forensic audits to understand the intent of the borrower.
