Question

Non-Performing Assets (NPAs) in the Indian Banking sector has become the subject of

much discussion and scrutiny. Bank’s lending capacity has been severely eroded by

mounting NPAs, net worth of many banks have declined and a number of banks have

reported huge losses. In recent year’s plethora of rules and regulations have come from

RBI, Government, IMF, BASEL recommendations, etc to keep a tab on stressed assets

and timely resolution.

In light of above statements:

a. Write the major reasons for increase on NPAs since last 10 years?
b. According to you what would be the mitigating factors/solutions for NPA management.​

Answer 1

Answer:

a.)Poor law enforcement and faulty regulatory measures in checking the ingenuity of.

the borrower.

Lags in due diligence and analysis carried out by the banks before sanctioning a.

loan.

Inability of banks to declare defaulters as 'wilful defaulters'

b.)SARFAESI ACT, 2002. The SARFAESI empowers banks to deal with NPAs, without the involvement of court, through three alternatives: ...

Debt Recovery Tribunals. ...

Lok Adalats. ...

Compromise Settlement. ...

Credit Information Bureau.

Explanation:

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