Letter to BS: Sluggish growth in resolution of bad loans need more measures

This refers to “Let’s find a new way to deal with bad loans"(April 15) by Tamal Bandyopadhyay. The sluggish progress in the resolution of the big-ticket bad loans and the recovery of other medium- and small-sized bad loans need more effective measures to save the rising credit costs as well as to benefit the lenders from the loss arising out of the time value of the money. 

Reforms in the definitions of the prudential norms on income recognition and asset classification — which should inter alia be based on the capacities and time consumed by the various segments of the economy to generate revenue — are paramount to make the guidelines more realistic and applicable to the dynamic economy. The dependence of the banking sector on other sectors must reflect in the prudential norms.

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VSK Pillai, Kottayam

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