It is the shortcoming in the credit appraisal, disbursal and recovery mechanism of the banks, besides the economic slowdown that can in large part be held responsible for their high levels of the Non-Performing Assets (NPAs).  Lack of robust verification and screening of application, absence of supervision following credit disbursal and shortfalls in the recovery mechanism have led to the deterioration of asset quality of these banks, according to RBI Deputy Governor R Gandhi.

Addressing a meeting of the ASSOCHAM, Gandhi dealt at length about different issues related to the deterioration about the quality of assets in banks. Following are excerpts from his speech delivered in Mumbai on May 31, 2014. 
 
Read full speech on http://rbi.org.in/scripts/BS_SpeechesView.aspx?Id=897