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