And, Indian banks should keep in mind that their net interest margins (NIMs) are very high as compared with their counterparts in many other countries. This only indicates the need for improving efficiency and considerable scope for bringing down the cost of intermediation.
Based on loan-by-loan data for as many as 660,000 loans collected from the relevant banks at annual or bi-annual frequency, and covering the period from the end of 2008, it is possible to model some of the determinants of a loan’s migration from performing to non-performing, and of cures.