2. Reasons
● Illiquidity - Assets sold at a loss.
● Inadequate Capital - Liabilities
greater than assets.
3.
4.
5.
6.
7. Recent Decision & Strategies
The Central Vigilance Commission (CVC) has
constituted the Advisory Board for Banking
Frauds (ABBF) to examine bank fraud of over 50
crore rupees and recommend action.
8.
9. Modi government's '4R' strategy
to resolve NPA crisis shows
results; bad debt reduces by Rs
89,189 crore.
10. ● Banks must value their assets as far as possible
close to true value (recognition) as the RBI has
been emphasizing; once they do so.
● Their capital position must be safeguarded via
infusions of equity (re-capitalisation) as the banks
have been demanding.
● The underlying stressed assets in the corporate
sector must be sold or rehabilitated (resolution) as
the government has been desiring.
● Future incentives for the Private Sector and
corporates must be set-right (reform) to avoid a
repetition of the problem.
11.
12. The Reserve Bank of India (RBI)
has decided to transfer ₹1.76 lakh
crore to the Central government
from its own reserves.
