Npa and Its Recovery Measures

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The magnitude of NPAs have a direct impact on banks profitability as legally they are not allowed to book income on such accounts and at the same time banks are forced to make provision on such assets as per the RBI guidelines. The Indian Banking sector is facing a serious situation in view of the Mounting NPAs which are the tune of Rs.56,000 crores in March 2002.NPAs is an important parameter in the analysis of financial performance of banks. The reduction of NPAs is necessary to improve profitability of the banks and comply with capital adequacy norms. Therefore, to solve the problems of existing NPAs, quality of appraisal supervision and follow up should be improved. The NPAs can be avoided at the initial stage of credit consideration…show more content…
The balance amount of the compromise has to be paid within six months of the date of sanction without interest or 12 months with interest. The upfront payment on the sanctioned amount within one month will make the borrower eligible for the 15 percent Discount on the sanctioned OTS Amount. Clients are requested to take the benefit of the scheme and relieve their burden of Debts. SBI is going to accept applications till 31.07.2012 only.. Punit B Juneja Juneja Legal (The Law Firm) THE SCHEME IS AS UNDER SBI SCHEME FOR ONE TIME SETTLEMENT OF NPAs of MSME (SBI OTS - MSME, 2012) . 1. Salient Features : i. This will be a non-discretionary and non-discriminatory scheme. ii. Last date of receipt of application : 31.07.2012 iii. Last date for Conveying sanction : 30.09.2012 iv. The scheme will be applicable to doubtful or loss assets in MSME Sector as defined in the MSMED Act, 2006. v. While arriving at OTS amount, the value of tangible security will be the basic criteria, except in loss assets. 2. Coverage : i. It will cover all NPAs classified as “doubtful” and “loss’’ in respect of Micro, Small and Medium Enterprises as defined in the MSMED Act, 2006. ii. Cases pending before Courts / DRTs / BIFR will be eligible, subject to consent decree being obtained from the Courts /
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