India’s macroeconomic stability is under threat from non-performing assets, which have shot up from 4.3 per cent of advances or, Rs 2.9 lakh crore, in March 2015 to 9.2 per cent of advances or, Rs 6.7 lakh crore, in December 2016. Although loan recoveries and upgrade of stressed accounts of public sector banks have risen 60 per cent and 43 per cent respectively year-on-year, they are forced to sell assets.
With Basel III norms — which make it mandatory to have a capital adequacy ratio of nine per cent and a further reserve buffer of 2.5 per cent of risk weighted
