The NPAs in the private sector banks are well above the normal level. The consequences envisaged during the past several years are many. It has become a difficult task for the banks to reduce the lending rate due to the presence of large NPAs. Ultimately this is affecting the competitiveness of the Indian banks. When the bank does not enjoy the market competitiveness naturally the credit expansion would be slumped and when it happens, the profitability gets a setback.
