Evergreening of Loans

Recently, the Reserve Bank of India (RBI) Governor raised red flags over banks adopting innovative methods for the evergreening of loans.

About Evergreening of Loans

  • The evergreening of loans is a term in which banks try to revive a loan that is on the verge of default by granting further loans to the same borrower.
  • It is a form of zombie lending in which banks provide more loans to the borrowers to stop them from turning into huge non-performing assets (NPAs).
  • The process of evergreening of loans is typically a temporary fix for a bank covering up the real status of ....
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