• Welcome to NPA Consultants Pvt. Ltd.
  • +919892855900
  • info@npaconsultant.in

Blog List



Posted Date: 09-07-2019 Posted By: user

When you run a business, chances are you would have borrowed money from banks or financial institutions.

When you have a loan, it is crucial not to default its repayment.

It is qualified as an NPA or Non-Performing Asset based on two delinquency norms- 90 days and 120 days.

If you are facing trouble in loan settlement, insolvency and bankruptcy code. Then, don’t worry! We have solution for npa management.

How will you avoid defaulting your business loan and going into the NPA category?

What led to the increase in NPA?

Why is there a signific increase in NPA during recent years?

Some of the driving forces were external such as the reduction in global commodity prices that resulted in a slower pace of exports. Some are intrinsic to the banking sector in our country.

The majority of the NPA loans were originated in the mid-2000s because the economy was flourishing, and the outlook about the business was very positive.

The loans were available effortlessly. Hence, business houses were more dependent on external borrowings instead of internal promoter equity. When the projects underperformed, borrowers lost their paying capability. On top of their defaulted loan, new loans were given to pay off the interest.

These loans were considered as Non-Performing Asset at a later date.

When the volume was small, there was no big problem. However, it became severe when it increased phenomenally.

What can you do to avoid being in default?

If you are a business owner who has taken a business loan, then there should be some measures taken to avoid getting into the NPA category.

Keep the date of repayment in mind

In the era of communication, it is unacceptable to miss a loan repayment date for the insufficient fund. Though it doesn’t take you directly into the defaulter category, if you miss it once, it eventually leads there when it becomes a recurring phenomenon.

Maintain sufficient balance

The account should contain enough balance to make sure you don’t land into the defaulter category. If you don’t pay within 90 days of the due date, there is a risk of getting into that.

Hence, always maintain balance in the account if you have given the mandate for automatic deduction.

Inform your lender

Let the lender know if you are missing a repayment date. Instead of not informing and hoping that you don’t default, it is better to inform the lender in advance.

You can reschedule the debt if possible.

By following these steps, one can save the loan from being defaulted.