But, pressures are building up in certain infrastructure sectors especially power sector, aviation, telecom, which could further increase the NPAs. Increase in interest rate and slowing economic growth may adversely impinge on repayment capacity of all categories of borrowers especially those from SSI, MSE, etc. There could be renewed requests for further restructuring from several sectors.
Banks, however, need to strengthen their credit appraisal and monitoring system as also recovery efforts. Recovery through compromise settlements/under OTS should be a transparent and analytical process after assessing all the options and ensuring that the net present value of the settlement amount is not less than the net present value of the realisable value of the available securities.