Stressed assets in PSBs: the way ahead

Abstract

The Reserve Bank of India (RBI) recently released the Annual Report, in which the then RBI Governor Raghuram Rajan mentioned about the stressed assets resolution. The asset quality review undertaken by the banking industry has certainly helped improve recognition of NPAs and provisioning norms. To improve management of stressed assets, two pronged strategy is being proposed — new management team if necessary, and tailoring the capital structure to the project’s situation. The need is to take an overall big picture analysis, especially of public sector banks (PSBs), covering governance, cost structure, risk management including cyber risk, technological upgradation, customer service and grievance redressal, amongst many issues, indicated by the RBI.

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