NPA
An NPA is a loan or advance for which the principle or interest payment remaine overdue for a period of 90days . According to the Reserve Bank of India’s latest “Financial Stability Report”, Gross Non-Performing assets (NPAs) rose from 9.2% in September 2016 to 9.6% in March 2017.
Costs increased due to delays in environmental and land clearances.
Revenues collapsed due to global downturn
INTRODUCTION
RBI increased interest rates due to rising inflation
Rupee depreciated leading to higher debt-servicing liabilities
Supply Constraints – Lack of infrastructure e.g. Road, power etc
Problems in Manufacturing sector
Evergreening of loans
Non- Coordination in banking system
Governance issues in banks management
ISSUES
MEASURES
CONSEQUENCES
Twin Balance Sheet syndrome
Decrease in credit growth
Decrease in Corporate investment ability
Decrease in production capacity
Rise in unemployment
Regulatory norms like CAR needs to be strengthened
Provisioning increases
STRATEGIC DEBT RESTUCTURING(SDR)
CORPORATE DEBT RESTRUCTURING(CDR)
5/25 SHEME
S4A
ARCs
DRTs
SARFAESI ACT
JLF
INDRADHANUSH PLAN
CONCLUSION
4Rs-RECOGNITION,RECAPITALISATION,RESOLUTION,REFORM(Economic Survey)
REFORM IBC
Discourage wilful defaulters(ex:Fugitive Economic Offenders Bill)
Amendment to the Prevention of Corruption Act
Insolvency and Bankruptcy Code to resolve/liquidate/auction NPAs