While framing these measures there was a sense of déjà vu, as the experience of similar dispensations extended during the earlier crisis periods were not very encouraging. It is now argued, albeit with the benefit of hindsight, that some of the regulatory dispensations on asset classification during the post-GFC period, contributed in part to the build-up of NPAs in the subsequent years.
But again, the key lesson which was drawn from the experiences of that period was that the problem assets need to be ‘recognized’ and ‘provided for’ at the earliest through realistic assessments and also by building in sunset clauses for the regulatory schemes to the extent possible. 7.