New Delhi, July 18, 2017
FinMin said any delay in recognition of deterioration in asset quality removes pressure on the banks
The finance ministry on Tuesday said the Reserve Bank is not examining any proposal to extend the 90-day period for classification of non-performing assets (NPAs) or bad loans to help small businesses.
The extant prudential NPA norms were brought in after extensive consultations and were based on the report of the Committee headed by M Narasimham on Banking Sector Reforms, Minister of State for Finance Santosh Kumar Gangwar said in the Rajya Sabha.
"Reserve Bank of India has informed that it is not examining any proposal on extending the Non-Performing Assets (NPA) classification norms from the current 90-day window to help small and medium enterprises," he said in a written reply.
The minister said the prudential norms are one of the building blocks for financial soundness of Indian banks and any deviation would render the banking system weaker.
"Further, any delay in recognition of deterioration in asset quality removes pressure on the banks to deal promptly with the problem," he added.
Gross of NPAs of the public sector banks totalled more than Rs 6.41 lakh crore at March end. The gross NPAs of the banking sector were at about Rs 7.28 lakh crore.
[The Business Standard]