3 min read.Updated: 29 Sep 2016, 09:38 AM ISTLivemint
The current bad loan problem is becoming a difficult learning experience for RBI
The bad loan problem in the banking sector is likely to linger for a long while. Among other things, it will affect the sector’s ability to finance productive sectors of the economy. The Reserve Bank of India (RBI), on its part, is trying different things to help the banking sector, but conditions at the aggregate level are not improving as desired. As a recent Credit Suisse report noted, on top of 12% impaired assets, another 4.5% of loans are estimated to be stressed—and expecting a turnaround in the asset quality cycle would be premature.
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