Several banks have shown a drastic decrease in the bad debt on their books, but a scrutiny revealed that it is not due to their recovery but because of the bank's decision to enter into "compromise write-offs" that helped them to cope up with bad debts.

For public sector banks (PSBs), the level of gross non-performing assets (NPAs) and restructured standard assets as a percentage of loans extended by them stood at 11.5% at the end of December 2012, as compared to 6.7% a year ago period, thus it nearly doubled the stress on loan books.

For certain banks, the situation has deteriorated very drastically, with the key measure to gauge the stress on banks from bad and restructured loans. The sharpest deterioration in the ratio was reported in banks like Punjab & Sind Bank (from 4.5% in December 2011 to 14.4% December 2012), Central Bank of India (4.9% to 18.1%) and IDBI Bank (3% to 11.5%). Union Bank of India is a unique case where the ratio has decreased during the period.