An Analysis of Non Performing Assets in Indian Banking Industry: The Tide is Shifting?

The crest of Non-Performing Assets sweeping the Indian Banking sector posed a crisis of sorts. Though the banking sector is no stranger to NPAs but the ensuing globalization coupled with the Damocles sword of Basel Norms made it more severe than it looked especially with the onset of new millennium. The acceptance of a new robust mechanism to make the banking sector less prone to the cruel twist and turns of a market driven economy made it inevitable for the sector to first prune the weak links. The stakeholders took the challenge in tandem with the regulators as well as the Government to check the downturn of assets. However, the immediate outcome was not encouraging. Insolvency and Bankruptcy Code (2016) and Bad Bank with a different nomenclature were introduced through legislative efforts. Though they were new concept for India, it will be too early to predict about success or failure of these new initiatives. The research paper focuses on the concept of the bad debts, its origin and remedies in the context of Indian banking system. The paper co-relates the resolution of bad debts with the growth of Indian economy.