NPA crisis is the worst crisis, if not handled properly, it may ruin the health of the concerned bank very badly. Not only the health of the bank but also it can ruin the banking system of the country as a whole if mishandled. The 2007-09 financial crisis is the best example of such incidents. Indian banking system right now is suffering from huge set back because of large percentage of NPAs So, the role of RBI is very important in such a critical issue. With many cases of NPAs coming into light, it is imperative for Apex bank to intervene and attempt to address such an issue which a large impact on the Indian Economy will have if not addressed. Always there are both pros and cons for any decision taken regarding the regulation issues. However, when benefits exceed the damages, then it can be a good decision. In the wake of one of the biggest outcome of NPAs in India RBI attempted to issue fresh guidelines which is commendable. Many sections of people criticized this thought as advancing loans is the commercial decision of banks and RBI has nothing to do with it. However, in wake of such disastrous outcome of an issue, it is a good move by RBI to regulate banks in the area of NPAs.