NPA levels of banks set to bloat with RBI's mega resolution framework

New RBI rules make accounts with 60-90 days' unpaid dues vulnerable

Over Rs 2.8 trillion worth of loans, where payments have remained outstanding for 60-90 days, carry the risk of slipping into the category of non-performing assets (NPAs) due to the revised framework for stressed loans. 

Besides pushing up the tally of gross NPAs, this may add to the pressure on banks to make enhanced provisions.

In banking parlance, accounts that have remained unpaid for 60-90 days are termed Special Mentioned Account (SMA2). While the risk of slippage remains high, not all of them will, however, become NPAs. 

In the Reserve Bank of India’s (RBI’s) new rules, banks would have to