Terms like bad loans, stressed assets, and non-performing assets (NPAs) are making waves in banking-related news. More recently, bankers have been insisting that the problem has largely been addressed and this situation would soon improve as recoveries begin. But then came the announcement of fraudulent transactions of around Rs11,400 crore at Punjab National Bank, the second largest public sector bank in the country. To put things in perspective, stressed assets in Indian banking system are about Rs10 lakh crore, said the chief economic adviser Arvind Subramanian (read here). So, the PNB fraud could add about 1% to the existing pile of stressed assets in the system.
After the PNB episode, you may have read doomsday predictions for your bank deposits on social media. Are your deposits really in trouble and should you worry about the health of banking system in India?
