The cornerstone of the latest change in NPA (non-performing asset) recognition and resolution is the Insolvency and Bankruptcy Code (IBC). These are from the two lists the Reserve Bank of India (RBI) drew for banks for quick resolutions using IBC. In the light of the fresh bad loan rules and their implications, we are a long way from saying the worst is over for the lenders. Analysts at Crisil Ltd expect the bad loan cycle to peak by only March 2019. While the RBI move will be good for the banking system in the long run, it will entail a substantial cost.

Source: Mint February 15, 2018 03:00 UTC