management of npa { kamal (mba)(iftm moradabad)
TRANSCRIPT
Presented By
KAMAL SINGH
MANAGEMENT OF NPA
(Non Performing Assets)
NON PERFORMING ASSETS
Non Performing Assets means a loan or
account of borrower, which has been
classified by a bank or financial institution as
sub standard, doubtful or loss assets, in
accordance with directions or guidelines
relating assets classification issued by RBI.
Non Performing Assets is the assets that does
not provide a return or effectual in generating
income.
PLANNING
ORGANISING
STAFFINGDIRECTING
CONTROLING
NPA have been divided into following four types:-
Standard Assets : A standard asset is a performing asset.
Standard assets generate continuous income. Such assets
carry a normal risk and are not NPA in the real sense. So, no
special provisions are required for Standard Assets.
Sub-Standard Assets : All those assets (loans and
advances) which are considered as non-performing for a period
of 12 months are called as Sub-Standard assets.
Doubtful Assets : All those assets which are considered
as non-performing for period of more than 12 months are
called as Doubtful Assets.
Loss Assets : All those assets which cannot be
recovered are called as Loss Assets.
INTERNAL FACTORS
Defective Lending Process
Inappropriate Technology
Managerial Deficiencies
Analyze The Balance Sheets
Purpose Of The Loan
Poor Credit Appraisal System
EXTERNAL FACTORS
Ineffective Recovery Tribunal
Willful Defaults
Natural Calamities
Industrial Sickness
Lack of Demand
Change In Govt. Policies
TOOLS FOR RECOVERING
NPA
(1) LOK ADALAT
(2) DEBT RECOVERY TRIBUNALS
(3) SRFAESI ACT 2002
(4) CORPORATE DEBT RESTUCTURING
LOK ADALAT
Lok Adalat as a very effective system of recover dues from borrower.
CORPORATE DEBT RESTUCTURING
The CDR System is applicable to standard and sub standard accounts with
potential cases of NPAs getting a priority.
SARFAESI ACT- 2002
SARFAESI ACT-2002 provides for enforcement of security interest in
movable (Tangible & Intangible assets including accounts receivable) and
immovable property without the intervention of the court.
DEBT RECOVERY TRIBUNAL
The Debts Recovery Tribunal (DRT) enforces provisions of the Recovery of
Debts Due to Banks and Financial Institutions (RDDBFI) Act, 1993 and also
Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interests (SARFAESI) Act, 2002
IMPACT OF NPA
1• REDUSE PROFITABILITY
2
• LIQUIDITY & OPPORTUNITY
COST
3
• IMPACT ON SHARE PRICES
IMPACT OF NPA
4• BORROWER GOODWILL
5• BANKING GROWTH
6• ECONOMIC GROWTH