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20 Jan, 2013

Banking system shows signs of instability on rising NPAs: RBI – Indian Express

The banking system has recently shown signs of moderate rise in instability due to increase in non-performing assets (NPAs), the Reserve Bank has said in a working paper.

“The movements in the banking stability indicator…that there are symptoms of a moderate rise in instability of the banking sector in recent periods perhaps due to the rise in the NPA,” it said in a working paper on Banking Stability – A Precursor to Financial Stability.

The NPAs, or bad loans, of the Indian banking sector rose sharply to 1.28 per cent in 2011-12 from 0.97 per cent in the previous year, because of high interest rate and slowdown in the global economy.

Read the rest: Banking system shows signs of instability on rising NPAs: RBI – Indian Express.