KARNATAKA VETERINARY ANIMAL & FISHERIES SCIENCES UNIVERSITY, BIDAR
DAIRY SCIENCE COLLEGE, BENGALURU
MBA (FOOD BUSINESS)
Rapporteur Report
Presented By: Sunil Kumar
Seminar Topic: “Non-Performing Assets in Indian Banking Sector: An overview”
Presented on: 07/07/2025
Rapporteur Name: Rakshith Kumar D
India’s banking sector witnessed a sharp rise in Non-Performing Assets (NPAs) between 2009–10 and
2017–18 after a period of decline until 2008–09. This increase was largely due to the Global Financial
Crisis, commodity price volatility, the Twin Balance Sheet problem (overleveraged corporates and stressed
banks), and internal issues such as poor governance and regulatory forbearance, particularly in Public Sector
Banks. The mounting NPAs weakened bank capitalization, eroded profitability, and disrupted credit flow
to the economy. To address these issues, the government and RBI initiated major reforms from 2018–19.
These included ending regulatory forbearance, enforcing the Prompt Corrective Action (PCA) framework,
and implementing the Insolvency and Bankruptcy Code (IBC) 2016 to expedite debt recovery. Additional
steps involved recapitalizing banks, merging Public Sector Banks to create stronger entities, and
establishing institutions like the National Asset Reconstruction Company Limited (NARCL), India Debt
Resolution Company Limited (IDRCL), and NaBFID to manage bad loans and support infrastructure
funding. As a result, NPAs have significantly declined, and Public Sector Banks have reported improved
financial health and record profits. These reforms have enhanced credit discipline, and enabled the banking
sector to better support India’s economic growth.
Key Questions Discussed during Question-and-Answer Session are:
1. What is the difference between bills purchased and bills discounted ?
2. What does it indicate when the ICR < 1 ?
3. Difference between past due and overdue?
4. What are the major differences between the phase-1 and phase-3 key factors ?
5. How does the nature & solution of NPA’s differ with respect to priority lending and corporate lending ?
6. How does global macroeconomic factors influence the NPA’s in India ?
7. What are the consequences of higher NPA on Indian Economy ?
8. Why there is increasing in NPA’s with respect to agriculture and allied sectors ?
9. What are the challenges to recover the personal loan and business loan when it is considered as NPA’s?
10. What is the Key difference between waive-off and write-off ?
11. What is the major reason for NPA’s percentage of 9.3% in 2015-16 when compared to 4.3% in the
previous financial year ?
12. What are the measures taken to prevent NPA’s ?