What are the major issues facing, the India Banking Sector in recent times? How to address the issue of NPAs?

Major issues facing the Indian Banking sector in recent times: Deteriorating Financial Health of Banks: Despite the recent decline in impaired assets and a significant improvement in provisioning, profitability of the banking sector remains fragile. The overhang of Non-Performing assets (NPAs) remains relatively high which is weighing on credit growth. Structural Changes: The need for brick and mortar branches is being reviewed continuously as digitization has literally brought banking to one's finger tips, there is no need to physically visit a bank branch for most of the banking services. Banks have to implement these new technology and business practices to remain competitive. Banking regulators on the other hand, have to focus on achieving a balance between promoting innovation and applying a proper supervisory and regulatory framework. That means the future of the banking will not be a continuation of the past. Digital Disruptions: Rapid digitalization of financial services in India. Globally, banks are facing increasing competition from non tradition players, which are taking advantage of digital innovation. Banks are not only facing completion from fintech companies but also for large technology companies (Big Tech) which are entering into financial services industry in a big way. In the light of these development, convention banking is making way for next generation banking with a focus on digitization and modernisation. Addressing the issue of NPAs: The sector specific pockets of NPA stress need policy attention. At the same time, proper due diligence and risk pricing on lending is of prime importance so that the health of the banking sector is not compromised while ensuring adequate flow of credit to productive section of the economy. Timely mitigation measures like faster resolution, better recovery etc., need to be continues to bring down the Gross Non-Performing Assets (GNPAs) ratios of all scheduled Commercial Banks (SCBs). While lower rate of credit growth limits the size of the denominator for measuring GNPA, risk arising out of the global and domestic economic conditions and geo-political development persist.