Tuesday, November 29, 2011

Bad loans have seen a sharp rise over the last three years

... Studies have shown that NPA growth lags bank credit growth by two years as it takes time for the excesses during a credit boom to turn into bad loans. According to the Reserve Bank of India (RBI), if 25% of restructured advances turn into NPAs, the gross NPA ratio would be 3% and if 100% turn into NPAs, then the ratio would be 5%.....

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