Abstract: The issue of non-performing assets (NPA), the root cause of the recent global financial crisis, has been drawing the attention of the policy makers and academicians alike. The problem of NPAs, which was ignored till recently,has been given considerable attention after liberalisation of the financial sector in India. This exploratory paper examines the trends of NPAs in India from various dimensions and explains how mere recognition of the problem and self-monitoring has been able to reduce it to a great extent.
Introduction: It has been argued by a number of economists that a well-developed financial system enables smooth flow of savings and investments and hence, supports economic growth (see King and Levine, 1993, Goldsmith, 1969). A healthy financial system can help achieve efficient allocation of resources across time and space by reducing inefficiencies arising out of market frictions and other socio-economic factors. Amongst the various desirable characteristics of a well-functioning financial system, the maintenance of a few non-performing assets (NPA) is an important one. Click here to read more…
Related Case Studies:
- Case Study on Nigerian Banks and the Global Financial Crisis Introduction: The financial crisis of 2007-2008 began in July 2007...
- Case Study on Understanding the Economics of Large Banks Introduction: Supervision of large financial institutions is arguably the central...
- Case Study on Commercial Paper Market in India A Commercial Paper (CP) is a short-term money market instrument...
- Case Study on Indian Banking Industry The banking industry is the backbone of any monetized economy....
- Case Study on Rural Credit Banks Funds “The Red Hat solution reduces our cost and increases the...