A petition has been filed in the Supreme Court to restrain banks from writing off non-performing assets(NPAs) and governments from waiving off farm loans.
The petitioner has said that Supreme Court should (a)restrain banks from writing-off of NPAs so that exact financial conditions of the banks can be shown(b) The Centre and state governments should not be permitted to reduce or waive off loans and (c)political parties should not be permitted to offer loan-waiving incentives or any other monetary schemes in their election manifestos.
The petitioner has also said that the practice of loan-waiving and writing-off of NPAs adversely affects the economy by increasing the fiscal deficit. Fiscal deficit is the amount of money that the government needs to borrow in a given year because their expenses were more than their revenues.
Non-Performing Assets(NPA) are loans or advances that are in default or are in arrears on scheduled payments of principal or interest,usually for a period of 90 days.Before the period of 90 days,they are called Stressed Assets.