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Case Studies
In a case study where a bank's NPA ratio rises sharply, what is the primary regulatory benchmark for Net NPA ratio under RBI norms?
RBI expects banks to keep Net NPA below 6% of net advances; persistent breach triggers Prompt Corrective Action (PCA) framework.
In a case study on bank lending, what is the purpose of a 'Credit Risk Rating' model?
To quantify borrower's default risk and determine loan pricing.
A case study shows a bank reporting 'evergreening' of loans — what does this practice mean?
Evergreening refers to extending fresh credit or restructuring existing loans to conceal defaults, thereby artificially preventing NPA classification.
A case study shows a bank's 'Gross NPA' versus 'Net NPA' — how is Net NPA derived?
Gross NPA minus provisions held against NPAs equals Net NPA.
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