The banking system has always played an important role in the growth and development of the economy and therefore countries with a sound banking system are said to be economically stronger. The failure of the banking sector adversely affects other sectors in the economy. Non-Performing Assets (NPAs) are one of the major concerns for any bank. When compared to some other countries, Indian banks have proven themselves to be more stable and transparent by following the international practices of corporate governance. Globalization has compelled them to compete internationally by giving importance to mass and social banking through the expansion of the network.

The introduction of internationally accepted prudential norms during the 1990s required the banks to regulate their credit flow and monitor it effectively. In line with the international practices and as per the recommendations made by the Committee on the Financial System, Chairman M Narasimhan, introduced, in a phased manner, the prudential norms for income recognition, asset classification and provisioning for the advance portfolio of the banks so as to move towards greater consistency and transparency in the published accounts.

Professional Banker Magazine, Non-Performing Assets, NPAs, Financial System, Public Sector Banks, PSBs, International Banking, Asset Reconstruction Company, ARC, Export Credit Guarantee Corporation, Corporate Governance, Banking System, Social Banking, Credit Management, Risk Management.