Here’s why Indian banks are safe

Here’s why Indian banks are safe

Going by the fiscal 2008 data, none of the Indian banks, big or small,can fail. This fiscal, beginning April, the situation has changed slightly for certain banks as their non-performing assets, or NPAs, are going up as consumers have started defaulting on their payment obligations with the rise in interest rates.

Their exposure to some of the troubled global banks that have either gone under or are staying afloat with government support have also come to the surface. But that is minuscule and will not make any significant dent in their balance sheets.

The best way of judging a bank’s health is looking at the most critical parameters such as capital adequacy ratio, asset quality and earnings, which define their ability to pay service depositors. On all these parameters, Indian banks more than meet the accepted norms

Also See None of the Indian banks, big or small, can fail (Graphic)

Also See Banks’ financial health (Graphic)

Data compiled by Ashwin Ramarathnam

Graphics by Sandeep Bhatnagar