The RBI and IBA concern over the rising NPAs stems from the fact that last week international rating agency, Standard and Poor's has severely castigated Indian banks' accounting practices.

Saying that the NPA norms in India are far more liberal than in most foreign countries, IBA chief said that it will not permit extension of repayment period from two quarters to four quarters for servicing interest and debt installments.

Rejecting the demand of Indian Merchants Chamber chairman Y P Trivedi for relaxation in NPA norms, he said that banks prudential norms in respect of loan repayment schedule are non-negotiable. "In fact, in advanced countries, the repayment schedule has been reduced from two quarters to one quarter. India wouldbe a laughing stock, if it goes against the trend," he said while addressing the members of IMC here on Monday.

The IBA chairman said of the total NPA worth Rs 45,000 crore, which was accumulated over the past 20 years in India, the priority sector accounts for about 50 per cent and the industry accounts for the remaining 50 per cent.

Also, of the total of Rs 45,000 crore, NPA worth Rs 20,000 crore is provided for with collaterals and guarantees, which are realisable. Therefore, he claimed, the net NPA accrued with banks is no more than Rs 25,000 crore.It may be recalled that the rating agency, S&P rating director, Ken Mclay had said last week that the RBI's gross NPA estimate of 17.8 per cent of the banking industry on account of the liberal country definition of NPA and widely prevalent practice of "ever-greening" -- a euphemism for rescheduling and restructuring of loans to make them good assets.

Indian banks are required to treat an asset as "sub-standard" when the borrowers fail to repay theprincipal and interests for two consecutive quarters (180 days) against the international practice of 45-90 days. The second Narasimham committee has called for tightening of the asset classification norms.

The asset quality of Indian banks has deteriorated over the last one year following industrial slowdown.

Meanwhile, on the wage deal with the bank employees, Selvam said the IBA will not compromise on its stand that only basic pay and dearness allowance should be negotiated at the industry level.

"We cannot mortgage the future. Days of survival have arrived," he said at a banker-customer meet here. "We need your support, you are the customers on whom we rely to pay these salaries," he said.

The United Forum of Bank Workmen and Officers has already drawn up an agitation programme including a nation-wide strike on September 18, after IBA and bank unions failed to make headway in wage negotiations. According to IBA sources, all banks except BoB and UBI have given mandates to IBA to negotiate on thewage-deal.