Lending institutions may become wary of large loans
With the Reserve Bank of India tightening the noose around NPAs, borrowers seeking large loans can be expected to be more realistic in their project estimations as well as repayment commitments. Lenders, on the other hand, particularly the PSU banks will re-examine many of the existing practices and perhaps reinvent the wheel so that borrowers are fully aware of the consequences of failing to meet their repayment obligations.
The story so far
It is now common knowledge that some 12% of the assets figuring on the books of Indian Banks collectively represent stressed assets. In other words,[....]