NPA are just starting...

There is a very large  account of NPAs with every bank today in the indian economy.  The RBI has forced banks to identify and report on the existing NPAs amd the impact can be seen on the balance sheets of each of these banks as they went through the quarter results.

However , as i hear from the ground.. this is just the beginning of the impact. There is a very large chunk which is coming due now... and which will most likely add to the NPA woes of these banks.

These new NPAs are most likely been done by fraud companies who have borrowed using the same books of accounts with multiple banks . If one believes the news x channel which is having a special series on NPAs most of these companies have shut down and are using these funds for their own personal purposes with no intent of returning them.. or will pay back the money with the banks taking a heavy haircut.It is a vicious circle.

Banks are going to go down in the dump because they are stuck. The bank managers who have their own interest due to the performance management system at the bank will continue to peddle this formulae.. once stuck.. get further into the quick sand.

The government and the RBI has its task cut out. Its a difficult scenario.. if they crack down even heavier .. the entire economy can go into a spin.

This is not simplefinancialsense