The Report of the Financial Sector Assessment Programme for India by the International Monetary Fund (IMF) makes the following recommendations:

• The level of non-performing loans in India remains high and the IMF has favoured bolstering the level of capitalisation of some banks, particularly government owned Banks.
• Together with capitalisation, the report asks for resolution and the recognition of Non-performing loans as part of the process of cleaning up the the banking system of non-performing loans.
• There were some steps that were taken by the authorities to boost capital buffers in banks and also to improve governance in state-owned banks that have had some positive impact.

The Financial Sector Assessment Program (FSAP), established in 1999, is a comprehensive and in-depth assessment of a country’s financial sector. FSAPs analyze the resilience of the financial sector, the quality of the regulatory and supervisory framework, and the capacity to manage and resolve financial crises.