Banks have always been adept at hiding bad loans. Even though they had the so-called core banking solutions in place by 2011, they were reluctant to use technology to identify bad loans. They preferred the human touch at different levels, from the branch to the headquarters. A lot depended on “interpretation”.
The Reserve Bank of India (RBI), over the past few years, has goaded them to shift to the system of automated recognition of bad loans in contrast to a manually-driven process. This helped reduce the divergence between the bad loan figures reported by a bank and the RBI’s assessment.
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
