What are non performing assets(NPAs)? Discuss the recent steps undertaken by the RBI to improve the fiscal prudence of public sector banks due to rising NPAs.

 What are NPAs:
According to RBI, terms loans on which interest or instalment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset.
Steps taken by RBI:

1. Indradhanush
2. Strategic Debt Restructuring (SDR)
3. SARFAESAI Act : It will be amended to enable sponsors of Asset Reconstruction Companies (ARCs) to hold up 100% stake in PSBs
4. Bank Board Bureau (BBB)
5. RBI’s 3R framework for revitalising distressed assets:

• RECTIFICATION*- no change in tenure or interest rates
• RESTRUCTURING- eased tenure/interest rate
• RECOVERY- SARFESI act

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