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The Hindu Vocab 29th Dec 2017

Testing times: on the bad loans menace

Structural reforms alone offer a viable long-term solution to the bad loans mess

The Central government has been working hard to address India’s twin balance sheet problem, but it hasn’t had much to show in the form of results. The Financial Stability Report released by the Reserve Bank of India, for one, suggests that India is still far away from solving the troubles ailing (अस्वस्थ/मांदा) its banks and large business corporations. According to the report released last week, gross non-performing assets (NPAs) in the banking system as a whole rose to 10.2% at the end of September, from 9.6% at the end of March. This, according to a research report released by CARE Ratings, puts India fifth among significant economies with the most NPAs. The RBI stated further that it expects NPAs to continue to rise to as high as 11.1% of total outstanding (बकाया) loans by September 2018, so the end to the bad loans mess (अव्यवस्था) seems nowhere near. The bad loans problem has also not spared (तकरार करना) private sector banks – these lenders have seen their asset quality deteriorate (बिगड़ना) at a faster pace than public sector banks. Private bank NPAs increased by almost 41%, as compared to 17% in the case of public sector banks at the end of September. Non-banking financial companies that compete (प्रतिस्पर्धा करना) against banks also saw a jump in NPAs. There are, however, some signs of hope as credit growth has begun to turn the corner (idiom) and shown faster growth on a year-on-year basis when compared to March.

Reforms (सुधार) undertaken until now though may not be good enough to tackle (सामना करना) the problem. The resolution of bankruptcy cases, particularly against large borrowers that contribute a major share of bank NPAs, under the new Insolvency and Bankruptcy Code should help bring the NPA situation under some control. In fact, despite its many imperfections (अपूर्णता) and the slow pace of resolutions by the National Company Law Tribunal, the Code can be helpful in cleaning up bank books in future credit cycles. The recapitalisation (पुनर्पूंजीकरण) of public sector banks too can help increase the capital cushion (अधिकता) of banks and induce (प्रेरित होना) them to lend more and boost economic activity. But bad debt resolution and recapitalisation are only part of the solution as they, by themselves, can do very little to rein in reckless (असावधान) lending that has pushed the Indian banking system to its current sorry state. Unless there are systemic reforms that address the problem of unsustainable lending, future credit cycles will continue to stress the banking system. In this regard, the government will do well to consider the recent advice of the International Monetary Fund to reduce its ownership stake in banks and give greater powers to the RBI to regulate public sector banks efficiently. Structural reforms are the only long-term solution.


  1. Ailing: chronically or repeatedly suffering from poor health
    Synonyms: sickly, invalid, weakly
    Antonyms: able-bodied, fit, hale, hearty, sound, well-conditioned, whole, wholesome, healthy, well
  2. outstanding: not yet paid
    Synonyms: overdue, owed, owing, payable, unpaid, unsettled
    Antonyms: cleared, liquidated, paid (off or up), repaid, settled
  3. mess: a state in which everything is out of order
    Synonyms: chance-medley, confusion, disarrangement, disarray, dishevelment, disorder
    Antonyms: order, orderliness
  4. spared: less plentiful than what is normal, necessary, or desirable
    Synonyms: exiguous, hand-to-mouth, light, niggardly, poor, scant, scanty, scarce, skimp, skimpy, slender, slim, meager, sparing, sparse, stingy
    Antonyms: adequate, enough, satisfactory, sufficient, tolerable, fat, fecund, fertile, fruitful, prolific, rich, lavish, luxuriant, blooming, bursting, flourishing, proliferative, swarming, teeming, thriving, excess, extra, surplus
  5. deteriorate: to become worse or of less value
    Synonyms: atrophy, crumble, decay, decline, degenerate, descend, devolve, ebb, regress, retrograde, rot, sink, worsen
    Antonyms: ameliorate, improve, meliorate
  6. compete: to engage in a contest
    Synonyms: battle, contend, face off, fight, race, rival, vie
    Words Related: challenge, engage, play, jockey, jostle, maneuver, go out, try out
  7. Reforms: to remove errors, defects, deficiencies, or deviations from
    Synonyms: amend, debug, emend, rectify, red-pencil, correct, remedy
    Antonyms: damage, harm, hurt, impair, injure, mar, spoil, aggravate, worsen
  8. tackle: items needed for the performance of a task or activity
    Synonyms: accoutrements (or accouterments), apparatus, gear, hardware, kit [chiefly British], material(s), matériel (or materiel), outfit, paraphernalia, stuff, equipment
    Words Related: accessories, appurtenances, attachments, fittings, apparel, attire, habiliments, raiment, trappings
  9. imperfections: something that spoils the appearance or completeness of a thing
    Synonyms: blight, blotch, defect, deformity, disfigurement, excrescence, excrescency, fault, flaw, blemish, mar, mark, pockmark, scar
    Antonyms: adornment, decoration, embellishment, enhancement, ornament
  10. cushion: something that serves as a protective barrier
    Synonyms: buffer, bumper, cocoon, cushioning, fender, pad
    Antonyms: baffle, muffler, safeguard, shield, barricade, cordon
  11. induce: to be the cause of (a situation, action, or state of mind)
    Synonyms: beget, breed, bring, bring about, bring on, catalyze, cause, create, do, draw on, effectuate, engender, generate, effect, invoke, make, occasion, produce, prompt, result (in), spawn, translate (into), work, yield
    Antonyms: impede, limit, restrict, clamp down (on), crack down (on), crush, dampen, put down, quash, quell, repress, smother, squash, squelch, stifle, subdue, suppress, arrest, check, control, curb, inhibit, rein (in), restrain, retard, can [slang], kill, snuff (out), still, abolish, demolish, destroy, extinguish, liquidate, quench
  12. reckless: having or showing a lack of concern for the consequences of one’s actions
    Synonyms: daredevil, devil-may-care, foolhardy, harum-scarum, hell-for-leather, irresponsible, kamikaze
    Antonyms: careful, cautious, circumspect, heedful, overcareful, overcautious, timid, responsible
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