Make it rule-based

A transparent approach to banks' bad loans is needed

While the bad loans problem in public sector banks has long been understood, some recent problematic results and associated regulatory actions have highlighted that banks in the private sector also have issues related to the quality of their assets. Under such circumstances, when the health of the overall banking sector is being scrutinised, it is essential that transparent and consistent measures are used to evaluate the quality of assets on banks’ books. Of late an impression has gained ground that the banking regulator, the Reserve Bank of India, and some of the banks that it is regulating have differences of