(ii)  This global downturn is likely to be a prolonged one. If banks do not recognise their problem loans here and now, and deal with them expeditiously, the problem will only get compounded with the passage of time and will keep haunting them in future. (iii)  The prudential regulatory norms ought not to be changed lightly, especially when markets are on edge.
If the impression gains ground that the modified norms understate the extent of impairment and over-state the asset quality in the banking sector, the markets could suspect the worst and needlessly penalise the banks through market discipline. These are the issues we need to reflect on in moving towards further regulatory forbearance.