Talwar was delivering the inaugural address at the first ever finance seminar of the South Asian Association for Regional Cooperation (Saarc) countries organised by the RBI on the `emerging trends in supervision' here on Wednesday.

Talwar said a large quantum of the non-performing credit can be termed as legacy NPAs acquired before the introduction of prudential norms. "It is worth mentioning that the incremental NPAs in subsequent years have been at much lower levels," he said. NPAs of the Indian banking system have already been provided for more than 50 per cent which is often ignored by internationalagencies while evaluating the NPA status of the domestic system, he explained. According to Talwar, the efforts of the RBI in strengthening the prudential regulations and supervision system had helped in sustaining the health of the banking system, enabling it to withstand the contagion effect of the east Asian syndrome.

Talwar said that there was a lot of pressure to reduce the asset clarification norms to one quarter in respect of past due loans.