Changing dynamics of Indian banking

One constant feature of banks' balance sheets over the years - in good times and bad - is the high bad loans in the agriculture sector. Can anything be done about it?

Indian banks are in the pink of health. The industry has never had such a good time when it comes to the quality of its assets. Gross bad loans — non-performing assets (NPAs) in banking parlance — dropped to a 12-year low of 2.8 per cent in FY24. After setting aside money for bad loans, net NPAs are at a historic low of 0.6 per cent.

In the second half of the last decade, some banks were in the ICU. Doctor Raghuram Rajan treated the sector; regular health check-ups were conducted at the diagnostic centre called the Reserve