Let's step back from the NPA Scare

Regulators and agencies need to instil less fear in lenders, so that they are able to actively restructure debts

Topics
Non-performing assets | Indian Banks | Indian lenders

Ajay Shah 

Ajay Shah

An “NPA Scare” is afoot in India: An exaggerated fear of non-performing assets (NPAs) and about the losses experienced by lenders. Business failure, and credit losses, are integral to lending.

If we shy away from all NPAs, or demonise default, this will harm economic growth. The focus on human interest stories, and on transactions that go wrong, tends to obscure the vast scale of successful lending that takes place. We need to relax a little about NPAs, and worry about the three things that are wrong with the Indian credit market: (a) Banking regulation, (b) The lack of a ...

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First Published: Mon, June 28 2021. 00:29 IST
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