A tough taskThese measures, particularly the RBI’s direct involvement in referring cases to the IBC, do well to add attention and urgency to the NPA resolution efforts. However, they do not address some of the underlying characteristics of the Indian economy and the banking sector that make NPA resolution a Sisyphean task in India. Promoters can be a hurdleAnother issue not addressed by the recent regulatory changes is what role promoters play in delaying NPA resolution. In India, business continuity and turnaround of distressed assets require the ongoing involvement of promoters, which makes them a key stakeholder in any NPA resolution. Then there is the question of whether the institutional framework within which the NPAs will have to be resolved is ready to handle this complex task.

Source: The Hindu June 28, 2017 00:45 UTC