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Banks cleaned up NPAs but retail lending is starving job creating firms

Economy
Published on 24 April 2026
Banks cleaned up NPAs but retail lending is starving job creating firms

Fixing bad loans may have choked funding to SMEs

Banks have largely stabilized their balance sheets by moving away from industrial stress and focusing on retail lending, easing the NPA crisis. But the unintended fallout is a squeeze on credit flow to smaller businesses and firms that create jobs, raising concerns about growth and employment as credit shifts to consumers instead.

  • Retail lending helped improve bank balance sheets
  • The NPA crisis eased after shifting away from industrial lending
  • Credit flow to job creating firms appears to weaken
  • Policymakers face a tradeoff between asset quality and growth
Read the full story at The Economic Times

This summarization was done by Beige for a story published on The Economic TimesThe Economic Times

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