No financial crisis risk, but NPAs remain a worry: Rajan

Worried over rising bad loans at some banks, RBI Governor Raghuram Rajan said there was no danger of any financial crisis but it may be early to declare that the worst was over on the NPA front, PTI reported.

No financial crisis risk, but NPAs remain a worry: Rajan
"I would not be prepared to make that statement today only because you see a variety of problems across banks. Some banks have managed to bring down their bad loan positions, for others it is still increasing," Rajan said in a reply to a query over Non-Performing Assets (NPAs) in the banking system.

"I would be more confident when there will be a uniform sort of series of results across the banks," Rajan said.

He, however, sought to undermine the concerns, saying, "if the question is whether are we in the danger of a financial crisis? The answer is no!"

He further said that he is more worried about the losses to taxpayers and the effects on banks' functioning due to their rising bad loan levels.

The Governor said resolution of NPAs will be possible only with higher economic growth, which he termed as "slow" and the actions which the banks take.

It can be noted that bad loans are on the rise and none of the banks in FY14 have reported any major improvement on the asset quality side.

Read more about: rbi, raghuram rajan
Story first published: Friday, May 15, 2015, 13:10 [IST]
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