‘Consortium lending led to more NPAs’

Consortium lending often led to inordinate delays in loan appraisal and resulted in swelling non-performing assets (NPAs) in the banking system, according to Rajnish Kumar, Chairman, State Bank of India. Consortium banking, as it was called till mid-90s, later became multiple banking following complaints of delay in appraisal process but even this did not result in faster decision-making, Mr. Kumar said at a FICCI-IBA seminar on Monday. On the other hand, it had led to more NPAs, he opined. Apportioning the blame for the sharp rise in NPAs over the last few years between bankers, the government, corporates and even the judiciary, he said everyone was responsible for the situation. “The problem of stressed assets, many people ask me, who is responsible for that. That is a question with which the country is grappling,” the chief of the country’s largest lender said. “I would say everybody is responsible, be it the bankers, be it the industry or borrowers, be it the government and without inviting contempt of the court, even the judiciary has played a role in this situation,” Mr. Kumar said. According to a report from ratings agency Crisil, gross NPAs rose to about Rs. 10.3 lakh crore, or 11.2% of advances, as of March 2018, compared with Rs. 8 lakh crore, or 9.5% of advances, in the year-earlier period.

Source : https://www.thehindu.com/todays-paper/tp-business/consortium-lending-led-to-more-npas/article24740689.ece

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