The action taken by the banks in case a borrower does not respond to the legal proceedings initiated by the lender will not weaken the position of borrower.

There has been a continuous decrease in the time period considered to declare a loan as non-performing. Currently, it stands at three months. The continuous decrease in the time period is to bring the Indian banking norms at par with international norms. This move will certainly reduce the Non- Performing Assets (NPAs) and in turn improve the asset quality of the banks. This will happen due to early diagnosis and better monitoring of NPAs and will certainly have no effect on the credit creation in the future rather reduction of NPAs will bring down the transaction cost of the banks which in turn will get reflected in the reduction of interest rate structure and increase in availability of funds.

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