How are Public Sector Banks (PSBs) addressing Non-Performing Assets (NPAs) in India

Public Sector Banks (PSBs) in India have taken several steps to address the issue of Non-Performing Assets (NPAs): 1. Recognition and disclosure: Banks have been directed to classify and disclose NPA accounts accurately, ensuring transparency and accountability. 2. Asset Quality Review: The Reserve Bank of India (RBI) conducted an Asset Quality Review to identify stressed assets and ensure their proper classification. 3. Resolution Frameworks: PSBs have implemented resolution frameworks like the Insolvency and Bankruptcy Code (IBC) and debt restructuring schemes to address NPAs and facilitate recovery of stressed assets. 4. NARCL: The National Asset Reconstruction Company Limited (NARCL) is being established to acquire and resolve stressed assets from PSBs. NARCL will help enhance the efficiency of the resolution process and reduce the burden on individual banks. 5. Strengthening Recovery Mechanisms: Banks have strengthened their recovery mechanisms by setting up dedicated departments, using technology-driven platforms, and engaging specialized agencies for debt recovery. Overall, PSBs are undertaking a multi-faceted approach to effectively tackle NPAs and improve the health of the banking sector.