DMPQ: India’s NPA problem is a chronic problem and exist at a larger scale then peer countries then what factors didn’t allow Indian economy to collapse? (economic)

the reasons are as follows:

 

  • Unlike east Asian crisis, Indian economy was on economic growth path with slight interruption.
  • India maintained and followed strong prudential norms in terms of offering of credit. Boom period didn’t become the excuse for reckless loan giving.
  • There were also control over the cooperates to take loan from foreign banks.
  • Most of the NPA problem was in the Public sector banks which maintained adequate capital to deal with the crisis further they had strong backing of the government which didn’t led to decline in the trust towards bank.
  • Indian banks and Big businesses didn’t committed the mistake as it was done by its counterparts during boom period.

 

 

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