Home News NPAs to pay Rs. 2 lakh crore by December 2018

NPAs to pay Rs. 2 lakh crore by December 2018

written by Aniket Gujrathi October 3, 2018
NPA

Before getting into the endeavor, it is better that we know what a Non-Performing Asset (NPA) is. A classification of loans and advances whose interest and/or installment of Bond finance principal remains ‘Past due’ for a specified period of time. A loan is labeled as a Non-Performing Asset when payments have not been made after a standard period of 90 days, but this elapsed time can be shorter or longer as well.

Carrying Non-Performing Assets put a heavy load on the lender since it hinders their primary course of action. Like lessening of earnings and budgets; due to heavy NPA the banks will not be able to provide subsequent loans, and the debts cancel the total earnings at the end of a financial year.

According to the latest calculations, fraud cases under IBC (Insolvency and Bankruptcy Code) cross Rs.40,000 crore, to put a check on this, the Minister of Finance and Corporate Affairs of India, Mr. Arun Jaitley said that state-run banks will be getting Rs. 2 lakh crore by the end of this year through the recovery of thousands of NPA.

Minister further added that “a large number of NPAs will be coming home……debtors are scared to be facing IBC”

It is mention-able that IBC was passed by Lok Sabha in 2016, to put a check on Insolvency and Bankruptcy.

The government has asked banks to get all their non-core assets to pay their debts by December 2018, due to which the banks had to shut down 41 overseas branches.

Punjab National Bank which was defrauded by their own employee Nirav Modi recently has put around 24 NPA on sale to recover Rs. 1320 Crore, SBI chief Mr. Khara stated that the bank has already started to review sectors of exposure and that the NPA trend is decreasing.

As a rehabilitation towards these huge NPA debts government has decided to supply around Rs. 13,600 crores in the public sector banks and Rs. 2,350 crore in Central Bank of India.

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