The health of Indian banks may be measured not just by the profits they have earned in recent years – to which treasury profits contributed a large part – but by their improving credit. In the decade since 1993, the gross non-performing loans (NPLs) of Indian banks fell from as high as one-quarter of their assets to around 7% in the year ending March 2004.
A report on Indian banks published in April by Fitch, the international rating agency, says that asset quality concerns have receded mainly through a combination of write-offs, non-performing loan recovery efforts and improved credit origination processes.
