Introduction to Difficulties With The Non-Performing Assets:
The individuals who deposited their money will not get back their market returns on their savings money. In this situation the banks will reorganize the lost facilities to the other borrowers and they will charge more and more high interest rates from them. The low deposit rates as well as the high lending rates will inhibit the savings as well as the financial markets that will slow down the growth and development of the economy
The non-performing loans will characterize the dreadful savings. The credits which are allotted to the genuine projects will not receive the funds that lead to the failure of the projects.
The non-performing loans will slow down the banking system as well as the convention within the money stock and this will lead to the narrow reduction in the economy. If the borrowers are not paying the interests to the banks then the banks will face shortage of liquidity. Within the banks the payments may be blocked because of this shortage.
As the loans are allotted mostly to the industrial houses and in some situations the individuals with higher standards will ask for the extension of their loan payment process, if the loan is extended then it will happen to be a non-performing asset.