Trend and Progress of Banking (2002-03) - Reserve Bank of India's Report
The Reserve Bank of India (RBI) feels that the banks have been neglecting their primary function of credit creation in favour of "narrow banking" for short-term gains. While this could be appropriate in times of easy liquidity, the macro-economic performance of the banking system in the long term would hinge on its ability to fund industrial and other enterprises. In 2002-03, commercial banks put up a good show. Their net profits registered handsome growth; return on assets saw a marked improvement; there was an enhancement in asset quality and capital adequacy ratios; and non-performing assets (NPAs) have come down further. However, while elaborating on these achievements, the Reserve Bank of India's latest Report on Trend and Progress of Banking has warned against any sense of complacency.
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