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For dealing with NPAs, struggling banks to be combined: RBI rules
April 17, 2017
- As per new guidelines issued by the Reserve Bank of India, the banks which have highest bad-asset ration might need to wind up or get merged with their rivals having better assets.
- This rule is supposed to be applied to all the banks in India, including the foreign lenders.
- RBI will be assessing bank’s asset quality, profitability, and debt levels for deciding a range of corrective measures for improving the bank’s status or for deciding which bank should it be combined with.
- This step might improvise the banking sector, given that the NPA recovery mechanisms by the RBI have totally failed.
