Will the most ambitious attempt be actually successful?
The RBI has embarked upon one of the most aggressive phases of NPA management. It has actually attacked the NPA problem simultaneously at two levels. Firstly, at the banking level, the Prompt Corrective Action (PCA) has been initiated against banks that have net NPAs beyond a certain threshold. The PCA will entail granular scrutiny of operations, restrictions on dividend payout, limits on recruitment and employee compensation, bar on branch expansion etc. Continue reading