Along with GST & Demonetisation, Non-Performing Assets (NPAs) may just be one of 2017’s most discussed issues in India’s financial sector. In a nutshell, NPAs are loans given by banks to individuals and organisations, which they (i.e. the banks) haven’t been able to recover. This may sound like a simple problem, but when it translates into losses worth hundreds of thousands of crores, it affects India’s economy. Badly.
Go through these to wrap your head around the issue:
1. Before you get started, let us warn you that you will hear some terms that might confuse you. From “wilful defaulters” to “debt restructuring”, we’ve de-jargoned these words for you.
2. India is currently facing an NPA problem worth Rs. 8,29,226 crores! How did this happen and what happens next? Watch our ’60 Second Summary’ on Non-Performing Assets, here.
3. Who’s fault is this anyway? The short answer is: The Banks. The Government. And the Borrowers. Everyone’s equally to blame in this vicious cycle.
4. If banks can’t recover their loans from borrowers, they charge higher interest rates from YOU. Our upcoming video shows just how badly this crisis will impact the public, so stay tuned!
5. One step before coming up with a solution, is identifying the extent of the problem. Meet the investigators.
6. Solution Time. One such option is… you guessed it… A bailout! Wait for our video to learn how these work.
7. Looking at the crisis with more of a prevention-rather-than-cure approach, from policies to tribunals here’s what we’re doing to regulate “bad loans”.
8. Guess you’ve realised by now that this problem isn’t going away overnight. Not just because of the scale of the crisis, but because the RBI has other (equally worrisome) sh*t going on.
9. Fingers crossed we recover these 9 lakh crores. Because THIS is how much that money is worth.
10. Is this just an India problem, you ask? Nope.
11. And your final read is a quiz! Going by these descriptions, can you pick out the right financial scam?