As per RBI guidelines, NPA is defined as under: Non ­performing asset (NPA) is a loan or an advance where; interest and/ or installment of principal remain overdue for a period of more than 90 days in respect of a term loan, the account remains‘out of … A Bank or a Financial Institution can send a legal notice to the borrower to pay back her liabilities within 6 days from the date of notice. RBI Slaps Rs.7 Crore Penalty On SBI For Non-Adherence To NPA And Other Norms Education Loan Market Shrinks 25% In Four Years: Report NPA Under Mudra Scheme Within Limits

In that case, a loan given to the Kingfisher Airlines is a good case for the consideration as NPA.Based upon the period to which a loan has remained as NPA, it is classified into 3 types:NPAs story is not new in India and there have been several steps taken by the GOI on legal, financial, policy level reforms. 70,000/- crores.

Gross NPA: Gross NPA is the total amount of outstanding NPAs in the borrowal account, excluding the interest receivable.

They are governed by the provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. This should include:This is “THE BASE” of Current economy, for technical background people.Please seen that pic frnd it has represented the correct form..Strict action should be taken against froud companies and hereafter loan amount should be deducted automatically from company account.Company and related person should not be allowed to open an account in other bank.Cash tranziction should be not be allowed.Follow the ClearIAS Prelims cum Mains Integrated Approach.Sustainable structuring of stressed assets (S4A) – 2016 It covers lawsuits with courts and DRTs (Debt Recovery Tribunals) however willful default and fraud cases are excluded.The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 – The Act permits Banks / Financial Institutions to recover their NPAs without the involvement of the Court, through acquiring and disposing of the secured assets in NPA accounts with an outstanding amount of Rs. | Powered by Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (SARFAESI Act) Factors affecting the Acceptance of Negotiation Proposal by Bank Now suppose that initially everything was good and the market forces were working in support to the airline industry, therefore, Kingfisher was able to service the interest amount. Like any other business, banks also must run on profits, but NPA eats into that margin for banks.The Reserve Bank of India (RBI) has a more detailed definition of NPA. Before this law came, lenders could enforce their security interests only through courts, which was a time-consuming process.It is for reducing the burden of the debts on the company It was created by the inclusion of all PSBs whose loans have become stressed.

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