The cabinet has cleared the nonperforming asset (NPA) resolution package, that includes an ordinance empowering the Reserve Bank of India to effectively deal with bad assets. The ordinance will help start efforts to clean up the balance sheets of banks burdened with bad debt. These changes will be reflected in Section 35A of the Banking Regulation Act, and enables the RBI to direct banks towards specific actions to deal with NPAs.

Bad loans at Indian banks surged in the past year, revealing previously hidden cracks in the banking system, after an asset quality review ordered by the central bank as part of a clean-up exercise. 

ICICI Bank, which has the highest amount of bad loans among India's private sector lenders, has said additions to its non-performing assets (NPA) in the fourth quarter were increased primarily by one borrower in the cement sector but expects bad loans overall to be "significantly" lower for the coming financial year. The bank also announced a bonus issue, and said it would issue one free share for every 10 held by investors. 

Stock in spotlight: Auto components major Motherson Sumi, whose share price has been trending up in markets and hit a new year high yesterday.

Photo of the day: April with her newborn baby giraffe at the Animal Adventure Park. Reuters