Stress/non-performing assets

Originally posted by : Rachit Jain
	Hello guys, i need to know some basic details about how do banks deal with their NPA accounts , what is the litigation involved or whats the basic framework of proceedings then . look forward to a healthy discussion on this

Hello Rachit,

Based on the guidelines of RBI, banks do provisioning of the NPA Accounts in their books which are classified as per slabs specified by RBI. The criteria is basically the duration since when the repayments are pending. The litigations are dealt under the SARFAESI Act, 2002. If the litigations do not provide positive results, the last option left with the banks is to assign their debt to institutions which are specially set up for the purpose of takeover of Debts from banks under SARFAESI Act. These Institutions are licensed for this purpose by RBI.

Hope this is helpful to you.

Thanks for your inputs Mr. Mishra,.

Would like to know more though, if anyone can elaborate further.