BAD LOAN MENACE

An NPA or a Non-Performing Asset is a loan that is on the verge of default by the borrower. As per Indian rules, if the repayment of a loan is delayed beyond 90 days, the loan must be recognized as a default and an NPA or Non-performing asset. The gross NPAs in India were 5.1% of total loans advanced (as per the RBI) as of September 2015 which is approximately 6 trillion to 7 trillion of non-preforming loans.

Measures taken by the government

• The Government has done recapitalization of banks by providing Rs. 25,000 crore in the last year Union Budget 2015-16 as well as in this year’s budget 2016-17.
  The Government has taken various measures to make the management professional, has given full autonomy to the banks in taking commercial decisions without any interference from the Government.
• Banks Board Bureau
• SARFAESI Act and DRT Act have been amended to make the recovery process more efficient and expedient.
• ‘Insolvency and Bankruptcy Code, 2016’.