Target oriented approach in Indian banks has eroded the quality of lending, leading to high level of NPAs that has resulted in negative impact on their profitability due to the necessity of provisions, recoveries and write offs as per RBI guidelines. NPAs also negatively impact the capital adequacy ratio, net worth and credibility of banks. Rising NPAs have direct impact on the bottom line as legally banks cannot book income on such accounts. Indian banks need to be more proactive in all their operations, particularly risk identification and management, to operate profitably in the...