NPA classification period likely to get 30-day extension as bad loans mount

The Centre is in talks with the Reserve Bank of India (RBI) and other stakeholders to consider the possibility of easing the norms for non-performing assets (NPAs), or bad loans, by extending the classification period to at least 120 days. At present, a loan account turns into an NPA if it is not serviced for 90 days. The proposal comes in the wake of mounting bad loans, particularly of state-owned lenders, due to disruptions caused by the Covid-19 pandemic. According to the RBI, the NPA ratio of all commercial banks may increase from 8.5 per cent in March 2020 to 12.5 per cent in March .....

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