Non Performing Assets free essay sample

The banking industry is the backbone of any monetized economy. The stage of development of this industry is a good reflection of the development of the economy. The banking industry in India is governed by Banking Regulation Act of India, 1949. Since 1949, this sector has undergone phenomenal reforms due to the efforts and the vision of the policymakers. The first phase of reform began with nationalization of the 14 banks in 1969. At this stage, priority sectors were identified and banking support was given to them. The second phase was the nationalization of 6 more banks in 1980. However, what can be considered as a breakthrough in banking services was the entry to private sector banks which was initiated in 1993. Eight new banks entered the market at this stage with state 0 of 0 art technology and a brought with them a new wave of professionalism. It was at this time that India was introduced to the concept of Debit and Credit cards, e-transfer of funds, ATM and mobile banking. We will write a custom essay sample on Non Performing Assets or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page It was at this time that competition was truly introduced in this sector. At present, the industry is in the makeover mode. The Public Sector Banks (PSBs) are in the midst of rejuvenation process with exercises like downsizing the units, educing the volume of Non Performing Assets (NPAs). They are gearing themselves for the fierce competition that is posed by the private banks. Private banks, on the other hand, are in the consolidation mode. Big banks are getting bigger. Small banks are being taken over by the bigger ones. Mid 0 sized banks are expanding. The sector is in the growth stage with many new products and services offered and a wide market base tapped. Quality of assets has improved and the confidence in the system is building up due to the increased transparency norms. Government interference is also gradually reducing.