Indian Banking in 2002 represents a sea change from what it was a decade back. It is a decade of Professional banking moving towards Global Standards. NPA in 1992-93 was a nightmare. Today it is still a problem (albeit a major problem, but under process of firm control). The Government of India is not recapitalising PSBs in 2001-02, though it released the last installment of an earlier committed amount to Indian Bank (a single case). Banks in general have performed extremely well in 2001-02. There are no public sector banks termed as "weak Bank" today. PSBs now are in a mood to compete and face competition form private & foreign Banks.

In 1992-93, "the profitability of the PSBs as a group turned negative with as many as twelve nationalised banks reporting net losses. By March 1996, the outer time limit prescribed for attaining capital adequacy of 8 per cent, eight public sector banks were still short of the prescribed Limit." The public sector banks which suffered losses of Rs.3,293 crore in 1992-93 and Rs.4,349 crore in 1993-94, i.e. in the initial years of introduction of prudential norms, have ended the year 1997-98 with a net profit of Rs.5027 crore. Net NPAs of public sector banks formed 8.2% of the net advances and 3.3% of the total assets as at the end of March 1998. Corresponding figures as at 31.03.2002 is 5.82% and 2.42%. PSBs recorded an aggregate net profit of Rs.8,301.24 Crores in 2001-02. NPAs as at 2001-2002 group-wise can be seen from this Table

What contributed and brought forward this positive turn-around in Indian Banking? It is on account of a series of steps towards professionalising Indian Banking bringing them at par with International Institutions that is responsible for the new face of Indian Banking emerging in the New Millenium. In the following five pages the changes representing rapid developments in Indian Banking in the last one decade are briefly and methodically presented.

1. Analysis of the diverse factors that resulted in the piling up of NPAs in 1992-93 and thereafter

2. Corrective Steps Launched by RBI under each item of the contributing factor as detailed above

3. Groupwise Statistics of NPA as at end March, 2002 (Latest)

4. Comments of RBI about Problem of NPA pertaining to commercial Banks as expressed in the annual statements of Report on Indian banking and Report of Monetary and Credit Policy

5. Conclusions