- The biggest problem facing the banking industry is the increasing NPA's. When we look into NPA's we can see that the major defaulter's are MNC's and big corporates and other wealth customers who are capable of paying but are not willing to do so.
- Even though we boost of financial inclusion it remains a distant dream. In India their are thousands of villages which still don't have access to basic banking services.
- Bank's sometimes find difficulty in following KYC norms. By this they are knowingly or unknowingly promoting money laundering. The recent fines imposed by RBI is an example.
- After the global economic slowdown banks find it difficult to lend money to priority sector as the chances for loans becoming NPA is greater.
- Insufficient technology and high cost of technology up-gradation is also a challenge.
How NPA's can be minimized?
- Constant monitoring and taking corrective actions at the earliest in case of default account.
- Before granting loans ensure that proper security is available.
- Sharing information of constant defaulters.
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