This refers to the report “Move to system-identified NPAs: Banks seek extension of deadline” (July 22). On the face of it, it may seem that banks are hesitant to declare the true position of non-performing assets (NPA) derived directly from the system without manual intervention. However, it is necessary to understand the difficulties banks face in relying completely on system-driven data. The primary reason for the non-reliability of system-driven NPA data is the deficiency in the IT software used under the Core Banking Solution (CBS) by a majority of banks. Also, there are several definitions for the classification of an asset into NPA or Standard, depending on the nature of the advance account. Thus, it would require a highly sophisticated CBS system to capture the correct NPA position that takes into account the various definitions and exemptions provided for NPA and perfection in data entry as well as supervisory functions at the branch level. The need for more time to set right the basic requirements to give a fair and true NPA position is justified.
S Ravindranath, Coimbatore
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