Accounting for the 10 trillion in NPAs

iability as a nation. The current scenario challenges that stability. Anna Ilyina, formerly division Chief of IMF’s Monetary and Capital Markets department, had said: “The level of non-performing loans (NPLs) in India remains high. And the level of the capitalization of some banks, particularly government-owned banks, should be bolstered.” And, we’re seeing more disclosures reported. Obviously, our first instinct is to blame the defaulters. This is understandable; after all, they are the ones who did not pay-off the loans that they so borrowed.

But in terms of accountability, where does this leave the banks? Was there something systemic in the Indian banking system which prevented banks from an early intervention? Had the banks drawn due attention to the early warning signs, taken the right measures to mitigate red flags and adhered to a robust exit strategy, could the impact, if any, have been lesser? Could technology have helped in this regard?

The answer is yes, yes and yes.