What are the legacy problems indian banks are facing?
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There are many legacy problem Indian banks are facing nowadays. Some included are :
The bad-loan problem stems from a rash of heavy investment over the past decade in areas such as power, infrastructure and steel, propelled by enthusiastic bank lending — principally the state-owned lenders that accounted for three-quarters of system assets, a legacy of the sector's nationalisation in 1969 by Indira Gandhi, one of Mr Modi’s predecessors. But as many of those borrowers encountered financial difficulties linked to project delays and overly optimistic income projections, the sector's non-performing loan ratios surged.
Bank results for the final quarter of 2016 show that non-performing assets reached 9.5 per cent of the loan book, according to Credit Suisse analysis — up from 7.6 per cent at the end of March, and 4.5 per cent a year before that. The problem is particularly severe at the state-owned lenders, where 15 per cent of loans count as stressed if restructured assets are important. I hope the answer was helpful to you If it was please mark it as brainlist
The bad-loan problem stems from a rash of heavy investment over the past decade in areas such as power, infrastructure and steel, propelled by enthusiastic bank lending — principally the state-owned lenders that accounted for three-quarters of system assets, a legacy of the sector's nationalisation in 1969 by Indira Gandhi, one of Mr Modi’s predecessors. But as many of those borrowers encountered financial difficulties linked to project delays and overly optimistic income projections, the sector's non-performing loan ratios surged.
Bank results for the final quarter of 2016 show that non-performing assets reached 9.5 per cent of the loan book, according to Credit Suisse analysis — up from 7.6 per cent at the end of March, and 4.5 per cent a year before that. The problem is particularly severe at the state-owned lenders, where 15 per cent of loans count as stressed if restructured assets are important. I hope the answer was helpful to you If it was please mark it as brainlist
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5 key challenges faced by India's banks
- Asset quality
- Capital adequacy
- Unhedged forex exposure
- Employee and technology
- Balance Sheet management
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