Management of Non-Performing Assets
Non-performing assets are problematic for financial institutions since they depend on interest payments for income. Troublesome pressure from the economy can lead to a sharp increase in non-performing loans and often results in massive write-downs.
MANAGEMENT
Suggestions:
* There surely is a need to distinguish between willful and unwilling defaulters. In case of the latter category of defaulters the law should not be as harsh as in case of willful defaulters. • The act should be judiciously and selectively applied so that NPAs could be converted into performing assets.
• Compromise wherever possible and desirable should be resorted to as per bank’s extent terms and conditions.
• Creation of additional benches and enhancing the capacity of DRT (debt recovery tribunal) can be rationalized and delays could be avoided.
• Segregation of the benches should be done in order to ensure that a flood of small cases do not retard the disposal of larger cases.
• In order to reduce the balance of NPAs, Bank should constantly review and monitor the accounts and the progress of the project for which the loan has been sanctioned.
Findings:
The reduction in loan installment to 90 days may raise the NPA levels in the short run. But in turn will improve the asset quality of the banks.
2. The lenders cannot take undue advantage of the new act. Provisions for lenders liquidity have been added to protect the borrowers against irresponsible claims by lenders. 3. Private Banks have more efficient management of NPAs as compared to PSBs.
4. Gross NPAs of PSBs are 51537 and whereas private sector Banks are 5771.17.
5. Due to the introduction of securitisation, public sector banks have been able to reduce their NPAs to a considerable event.
6. Securitization Act is remarkable legislation in the Indian Banking history, certain issues are yet to be resolved for effective, implementation of the Act.
7. NPA art can help reset lending rates.
8. The net NPAs of UBI
MANAGEMENT
Suggestions:
* There surely is a need to distinguish between willful and unwilling defaulters. In case of the latter category of defaulters the law should not be as harsh as in case of willful defaulters. • The act should be judiciously and selectively applied so that NPAs could be converted into performing assets.
• Compromise wherever possible and desirable should be resorted to as per bank’s extent terms and conditions.
• Creation of additional benches and enhancing the capacity of DRT (debt recovery tribunal) can be rationalized and delays could be avoided.
• Segregation of the benches should be done in order to ensure that a flood of small cases do not retard the disposal of larger cases.
• In order to reduce the balance of NPAs, Bank should constantly review and monitor the accounts and the progress of the project for which the loan has been sanctioned.
Findings:
The reduction in loan installment to 90 days may raise the NPA levels in the short run. But in turn will improve the asset quality of the banks.
2. The lenders cannot take undue advantage of the new act. Provisions for lenders liquidity have been added to protect the borrowers against irresponsible claims by lenders. 3. Private Banks have more efficient management of NPAs as compared to PSBs.
4. Gross NPAs of PSBs are 51537 and whereas private sector Banks are 5771.17.
5. Due to the introduction of securitisation, public sector banks have been able to reduce their NPAs to a considerable event.
6. Securitization Act is remarkable legislation in the Indian Banking history, certain issues are yet to be resolved for effective, implementation of the Act.
7. NPA art can help reset lending rates.
8. The net NPAs of UBI