NPA’s boggling banking sector
Nowadays, the NPA has a big grip in India and it is dominated by everywhere. If seen, NPA of all public sector banks is 734,000 crores and of which only Nirav Modi has 11,400 crores which are only 1.5% of the entire NPA. This scam of Nirav Modi appears to be like cumin in the mouth of the camel in front of the total NPA of banks.
However, during the tenure of the last three finance ministers, efforts have been made to bail out the banks from NPAs, even in the last 11 years, the government has given more than 2.6 billion rupees to the banks to overcome this crisis.
If compared, then this amount is more than the amount allocated for the rural development by the Indian government. Given the lack of capital of the banks, this money has been given to the banks for recapitalization by the government, but still, the banking sector is on the brink of insolvency.
Let me tell you when a borrower fails to pay the bank, its loan account is called a non-performing asset (NPA). According to the rules, when a loan’s EMI, principal or interest does not come within 90 days of the date, then it is put in NPA. NPA is also called non-performing asset, which means that the asset which was given to the bank, but could not be earned.
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