Important to deal with non-performing assets: Viral Acharya
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India, July 28 -- 1. In his speech at the SBI Conclave, the RBI governor said that we are entering a phase where extant wisdom about capital requirement of banks and potential growth of economy might not be of much use. What do you make of his remarks?
(Hindustan Times) -- My interpretation of his remarks is that we might have to encounter scenarios of stress which far exceed the usual standards of Basel capital requirements. Implicitly what he was suggesting was that the hit of a prolonged lock down on bank loans of individual and MSMEs might far exceed traditional losses. The latest Financial Stability Report endorses his remarks. The Non Performing Assets (NPAs) to advances ratio is far in excess of what we have ever seen. With the GD...
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