NPA Consultants Pvt Ltd

The problem of NPA or Non-Performing Assets has impacted the health of banks and financial institutions in India two decades before. If we see hard facts, then in the financial year of 2017, the value of NPA in private sector banks was approximately 900 billion rupees or more. But by following stringent regulations, the government has brought it down significantly. ccording to financial analysts, the gross NPA ratio is a measure of the overall quality of a financial institution’s loan book. What is Non-Performing Assets? In broad terms, it can be defined as a classification for loans or advances that are in default, or they are in arrears. It means the interest payment or principal is either missed or delayed. This loan account is called a NPA. It is a general definition of a non-performing asset. In India, an asset is classified as an NPA if the borrower has the principal or interest on the loan or advance given by the lender is overdue for a period of 90 days. There are three categor...

 Why do people take loans? It is a great way of helping your finance for various things. You may take a loan for completing your education, buying a new house, the wedding of your kids, to go abroad, or anything else. If you are a company, then you will take a loan to diversify your business or launch a new project. You make great planning and ensure that repayment of the loan is done in time. However, no matter how systematic your repayment plan may be, you cannot foresee all the possible bottlenecks. You may become a victim of unforeseen circumstances. There could be an unexpected loss in the business, or you lose your job due to an illness. Such circumstances will seriously hamper the ability to repay your loan. You will miss the installment and get follow-up calls and reminders from the bank. It affects your credibility and market value. When a bank or financial institution sanctions a loan, it expects that the loan will be repaid within the stipulated time. For a bank, a loan ...

 As the level of NPA or Non-Performing assets increases, it becomes a threat to the success of the financial institution. Then, the management of NPA becomes important. Only a comprehensive management strategy can bring an effective change in the situation. The Reserve Bank of India or RBI has given a detailed definition in its master circular. Not only that, but it has also given guidelines and a basic framework for managing NPA in the company. If we think about various NPA settlement methods, then One-Time Settlement is a prominent one. RBI Guidelines for One-Time Settlement Before going for One-time settlement a bank or financial institution should ensure compliance with the following guidelines. Authority that approves the settlement proposal should not be the same as that approves the settlement proposal. But the hierarchy level of sanctioning committee can be the same as the approval authority. The sanctioning authority should have exercised the power judiciously and it has a...