such as trade, industrial and fiscal policies and political factors too. 2. south africa prepares to open its markets compared with other regional groupings, the idea of a european union - like economic union is still some way off for the sadc, although progress is being made towards implementing a free trade agreement. a target implementation date has been set for january next year to begin the process of lowering trade barriers, streamlining customs and border procedures, and harmonising external tariffs. sadc trade and industry ministers are due to meet soon for negotiations on the trade protocol in the run - up to the start of implementation next year. there have been suggestions that south africa might extend market access concessions on a unilateral basis after certain key agreements have been reached. we understand that south africa plans to eliminate most duties on imported goods from other sadc countries by 2004 and the region could ultimately develop into a free trade zone. the free trade discussions and negotiations have received some attention in the media. generally speaking, it seems that people welcome the progress made by the sadc as a sign that it is finally getting down to business. also in the development programmes are infrastructure developments in the region, such as the maputo corridor which has spurred investments into various economic sectors estimated at r35bn. one example of a big investment is the mozal aluminium smelter, which has triggered the renewal of the maputo harbour. a very welcome development indeed. far less immediately newsworthy, but also very important for the establishment of a regional economic bloc, has been the work done by the committee of central bank governors. the work is an important building block towards the creation of a free trade zone. one cannot implement free trade in goods and services without having the proper financial systems in place ; the work of the committee of central bank governors can be seen as providing the oil that makes the wheels of commerce turn faster in the region. the implementation of a free trade agreement is made easier if national payments systems function properly and are compatible with individual states in the region. in addition, investors who want to take advantage of the liberalisation of trade will feel more comfortable if there is a high and uniform standard of bank supervision ; in other words, legal familiarity, certainty and a good sense of a stable, well regulated and properly supervised banking system. similarly, investors and potential business partners usually want easy access to reliable basic macroeconomic information of countries in the region. for goods to flow smoothly across borders, it is also important that capital

– 2011. during this time, the nominal credit growth was in excess of 20 % y - o - y and far in excess of the nominal growth in industry. 1 / 9 bis central bankers'speeches 5. as may be seen from the graph, stressed assets have registered a steady growth since 2011 ; but if we were to look at npas, the growth was muted until 2014 and has been more dramatic, particularly after 2015 – 16. this is because, the reserve bank undertook an asset quality review ( aqr ) that led to recognition as npa of several loans, which banks had then considered to be standard assets. indeed, npas went up from 4. 62 % in 2014 – 15 to 7. 79 % in 2015 – 16, and were as high as 10. 41 % by december 2017. asset quality review 6. in february 2014, the reserve bank issued the framework for resolution of stressed assets. an important part of the framework was the setting up of the central repository of information on large credits ( crilc ). crilc captured all exposures of banks above rs 50 million. the data was accessible not just to the reserve bank but also to banks. for the first time we created a supervisory database of this nature, which gave reserve bank a comprehensive view of the banking system ’ s exposure to a large borrower and how the exposure to the same borrower was classified differently by different banks. while our stand has been that asset classification should be based on the record of recovery with individual banks, crilc gave us the wherewithal to objectively assess whether the divergent classifications were indeed justified. it also gave us a better insight into movement of funds from one bank to the other to keep an account standard. 7. this way, the aqr, backed by crilc, enabled us to get a banking system - wide view of large bank credits and make a holistic assessment of the true state of health of those exposures. together, they led to identification of npas that had not been recognized as such by the banks and also of accounts that would require to be downgraded over various timelines, if necessary closures such as resolution or account upgrade were not achieved. the resulting recognition of true asset quality at banks largely explains the spurt in npas during the last three years. evolution of resolution frameworks in india 8. before i come to the framework enunciated in the circular of february 12, 2018