The Reserve Bank of India (RBI) Governor Raghuram Rajan has expressed concern about the size of the non-performing loans (NPL) in the banking sector.
Addressing a press conference, Rajan said that some banks aren’t doing enough to turn around the bad loan situation.
"If you ask, am I worried from the perspective of, are we in danger of a financial crisis, the answer is no. Am I concerned about the losses that it implies and the effects on bank functioning, on the losses to the tax payer, yes, I am concerned about the size of the NPLs," Rajan told a reporter.
Rajan also said that the RBI was in touch with the banks to identify the problems and trying to bring down the NPL at the earliest.
"The history of NPLs in the past in the banking sector has been a combination of actions by the banks as well as growth tends to restore bank's health... A slow recovery is underway, so I think that will help, but we are doing everything we can on the regulatory side to make sure that these bad assets are recognised, problems are dealt with and we move forward," he said.