Banking Sector: High On Credit Growth, Asset Quality

More Than 200 Accounts of large borrowers were identified as NPAs There are now 42 Banks in total listed on the stock exchange *** The banking sector has a symbiotic relationship with the economy. As banks expand, the economy gets a boost, and as the economy flourishes, the banks expand further. For instance, in the previous economic cycle, which saw robust growth, the banking sector exhibited remarkable performance. During 2002-07, the Nifty Bank index outperformed not only the Nifty index but also all other sector indices by a significant margin. But there have been exceptions as well. After a prolonged tough period, the sector has regained momentum in the last two years even amid challenging conditions. The sector extended huge loans to the infrastructure sector on the back of growth in the mid-2000s. Most of these turned into bad loans when the economy suffered. In RBI’s Asset...