Indian Banking: Strategies For Non-Performing Loan Management
- IJLLR Journal
- Aug 23
- 1 min read
Diya, St. Joseph's College of Law
ABSTRACT
The best indicator for the health of the banking industry in a country is its level of Non performing assets (NPAs). The problem of non-performing assets has shaken the entire Indian banking sector. The resolution of Non- Performing Assets and their recovery process relies completely on accurate credit evaluation and recovery system practice. Banks will tend to extend increased loans during periods of economic growth combined with liquidity imbalances. Adverse selection. and potential dangers of stock accumulation emerge from Competitive Unfair Lending Practices that degrade asset quality leading to concern about their selection process. High NPAs are one of the major concerns for banks in India. When an asset becomes NPAs the recovery wing states its operations. There are many recovery channels through which the banks recover NPAs. Performance of various recovery channels of NPAs in the Indian banking system is not found to be satisfactory. The Paper analyse the recovery mechanism of NPAs with its three important wing i.e. recovery through Lok Adalat, Debt Recovery Tribunals (DRTs) and Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act) and its impact on NPA.
