NPA Recovery & NPA Management Policies

NPA Recovery & Revival Steps which can be adopted by the Banks

  • The Bank has to assess the exact reason for NPA.

  • The Bank should assess and grant the additional working capital requirement so that the borrower can restart its stuck business.

  • By compromise, negotiated deal, by reducing interest or by waiving penalty so for levied in the account of borrower

  • By converting a portion of Advance of funded term loan to enable the unit to generate income

  • Bank can allow operations in the account when the unit is in bad shape, but retain a small portion to enable it to service the interest and thus unit will not be classified as NPA.

Preventive and curative measures to be taken by Banks for containment of NPA

  • Proper credit appraisal

  • Identifying the weaknesses Of assets through early warning signals

  • Up-gradation of assets through various methods

  • Recovery of NPAs through compromise settlements, announcement of OTS