Asset Classification Standards •  The definition of ’past due’ for a period of any two quarters in a financial year in respect of interest or instalment of principal under a credit facility has been adopted as part of the Asset Classification Norms to identify NPAs.
Some of the observed correlation may reflect simply the tendency of both credit and asset prices to rise during economic booms. However, to the extent that credit expansion is indicative of bubbles, I think that empirical linkage points to a better policy approach than attempts at bubble-popping by the central bank.