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Name : Yogesh Acharya
Subject: Reasons for NPA accounts
Message : Well, a universal root reason for an ever increasing NPAs is poor credit assessment.

With Banks flush with liquidity following recent rate cuts by RBI.This coupled with no credit off-take.Banks are enticed to go in for high risk borrowers along with investing in G-secs(low risk).They are calling this as a well diversified portfolio.

Another significant reason...this is more recent.Eligibility to classify an asset into an NPA has been reduced from 180 days to 90 days.This would again result an increase in the same.

Political compulsions (offering loans at low rate of interest) is another reason contributing to the same.




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