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The impact of SARFAESI Act 2002 in recovering the non performance assets in
public sector banks: A study on recovery in SBI, CBI, CB, BOB and PNB (2008 to
2014)

Article  in  International Journal of Applied Engineering Research · November 2016

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 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com

The Impact of SARFAESI Act 2002 in recovering the Non Performance

Assets in Public Sector Banks: A study on Recovery in SBI, CBI, CB, BOB
and PNB (2008 to 2014)

Mrs. Chandra Shaardha

Research Scholar, SRM University, Delhi NCR Campus,
Modinagar-Ghaziabad Uttar Pradesh-201204, India.

Dr. Ajay Jain

Assistant Professor, Guide SRM University, Delhi NCR Campus,
Modinagar-Ghaziabad Uttar Pradesh-201204, India.

Abstract: banking performance. Banks are the backbone for the

The banking sector in India is in a crisis with the increase in
burden of bad loans provisioning and the decline in
profitability of commercial sector banks particularly Public
sector banks. “Bankers are the heart and soul of any business.
The economy of the country also mostly depends on the
functioning of banking institutions. As per RBI Statistics,
annual growth of bank credit in India, which had crossed 30%
in the boom years of 2004-2007, has declined to 9.7% in
2014-15 and further to 9.4% in the first half of 2015-16. The
decline in credit growth has affect the profitability of
scheduled commercial banks, with public sector banks
suffering the most in this profit wring.
A breather in the form of SARFAESI ACT 2002 was
introduced by the recommendation of Narasimham
Committee II has been instrumental to recover the identified
NPA without intervention of the court. It allows the bank to
recover the loan by acquiring / possessing the financial assets
pledged or mortgaged with the bankers at the time of availing
of loans by borrowers. This paper attempts to study the
process and effect of SARFASEI Act 2002 and its impact in
recovering the non-performing assets in public sector banks in
India. To ascertain the recovery process of SARFAESI Act
with the other recovery methods adopted viz; Lok Adalats,
DRT and CDR in chosen public sector banks . The study has
been made to find out the percentage of recovery made in
SARFAESI Act 2002 in compare with Lok Adalat and DRT
and also to identify the number of cases referred to the Lok
Adalat , DRT & SARFAESI Act 2002 with respect to the
banks State Bank of India, Canara Bank, Central Bank of
India, Bank of Baroda and Punjab National Bank taken for the
study.
Key words: SARFAESI Act 2002, NPA, Recovery, Lending,
DRT, Lok Adalat , Narsimham Committee.
Introduction
Non-Performing Assets (NPA)-a defaulted credit facility-is an
important factor to identify the performance and strength of
the banks. NPAs is one of the bench mark to value the
development and economic growth of the country. The
banking performance has been categorized by the percentage
level Non performance assets as it is the indicator for the
profit measurement for the banking industry. The Banking
sector has come across turmoil’s to recover the bad debts from
the borrowers. These not only impact badly on a banks
account but also adversely impact the national economy. To
reduce the NPA level, the assets have to be recovered and
restructured properly. These procedures require more
legislation to accelerate the process.
The normal process of recovery of NPAs from borrowers was
to get a decree before Civil Court, both banks and borrowers
have to file the suit before a Civil court. Notice issue and after
trial, the court pass an order of Decree. Then, decree again
challenged by means of appeal to Supreme Court and to
finalize the judgment it takes nearly between 5 years to 20
years. After the decree was passed by appellate court the same
would be put into execution by filing E.P. The Execution
Court after service of notice would bring the property of the
debtor/guarantor for sale through auction. Even there would
be possibility of dismissal of suit also and certainty was not
there to recover the NPAs from borrower.
To make the systems easier for the recovery of the loans or
NPAs from the defaulters, Narasimham Committee II
recommended the formation of SARFAESI Act 2002, where
the NPAs could be recovered from the defaulter without
intervention of court by possessing the assets of the
borrowers. The bankers could sell the possessed assets to
ARC or restructured as the case may be.
The latest write off of bad loans to the tune of Rs. 1.14 lakh
crores during 2012-15 by bankers shaken not only
profitability’s, also the economic and GDP growth of the
country.
An enormous amount of Rs 1.14 lakh crore of bad loans
(NPAs) have been written off by 27 public sector banks
(PSBs) during FY 2012-15, with the last fiscal alone
witnessing a sharp 53% increase in write-offs as part of the
balance sheet clean-up. For the fiscal ended March 2015,
public sector banks have written off loans amounting to Rs
52,542 crore, an increase of 52.6 % over the previous fiscal,

5218
 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com
as per the RBI data. About one-fifth of bad loans was written
off in 2014-15 as the gross non-performing assets (NPAs) at
the end of March 2015 rose to Rs 2,67,065 crore. These 27
banks had written off Rs 34,409 crore in 2013-14 while Rs
27,231 crore in 2012-13. So in aggregate, a staggering Rs 1.14
lakh crore were written off in the last three fiscals.
S.No Year Public Sector Banks Amount in Crores
1 2014-15 State Bank of India 21213.00
2 2014-15 Punjab National Bank 6587.00
3 2014-15 Central Bank of India 1995.00
4 2014-15 Bank of Baroda 1564.00
5 2014-15 Canara Bank 1472.00
PSU banks have been witnessing a continuous surge in bad
loans. As on September 2015, the gross NPAs of PSBs have
increased to Rs 3, 00,743 crore as against Rs 2.67 lakh crore
in March 2015. The above figures and facts have been
published in “The Hindu” news paper on 8th Feb 2016 proves
the performance of public sector banks in the country affects
economic growth and also sheer profitability of the banks.
The major role played in these bad loans’ are from corrupted
business people, negligent and corrupt bankers, complicit
auditors and loop holes in the laws of banking regulations.
The Different types of recovery process for NPAs:
1. One Time Settlement Schemes
2. Lok Adalats.
3. Debt Recovery Tribunal (DRTs)
4. SARFAESI Act 2002
5. Assets Reconstruction Companies (ARC)
6. Corporate Debt Restructuring (CDR)
7. Information about the defaulters of loan by RBI
8. Credit Information Bureau
Among the above various ways to recover measures, the most
effective ways practiced for recovering NPAs from defaulters
are SARFAESI ACT 2002 , DRT , Lok Adalats and CDR
are discussed below:
Lok Adalat:
Lok Adalat has developed in India by Legal Services
Authorities Act, 1987. Otherwise it is called as "People's
court". Encouraged by Justice P.N. Bhagwati, a former Chief
Justice of India. Lok Adalat is a non-adversarial system,
whereby mock courts (called Lok Adalats) are held by the
State Authority, District Authority, Supreme Court Legal
Services Committee, High Court Local Services Committee,
or Taluk Legal Services Committee.. The first Lok Adalat was
held on March 14, 1982 in Gujarat. Lok Adalat’s help banks
to settle the loans by way of compromising between bankers
and defaulters of the bad loans through Lok Adalat. Debt
Recovery tribunals have been authorized to form the Lok
Adalat to decide on cases of NPAs of Rs. 10 lakhs and more.
The systems seemed to be more effective for recovery of
loans by immediate judgement on the cases referred. Lok
Adalat have been useful for mostly recovery on smaller loans.
5219
Debt Recovery Tribunals (DRTs):
Debts Recovery Tribunals (DRT) and Debts Recovery
Appellate Tribunals (DRAT) were constituted under the
provisions of the DRT Act for establishment of Tribunals for
expeditious adjudication and recovery of debts due to Banks
and Financial Institutions and for matters connected therewith.
DRT has also been given the power to adjudicate the
applications filed by the Borrower/Mortgagor against the
action of the Secured Creditor initiated under the
Securitization Act.The Debt Recovery Tribunals have been
established in India under an Act of Parliament (act 51 of
1993) for speedy swift recovery of debts due to banks and
financial institution’s by GOI. The debt recovery tribunal is
also the appellate authority for appeals filed against the
proceedings initiated by secured creditors under SARFAESI
Act 2002.
Corporate Debt Recovery Cell / Restructuring:
The Corporate Debt Restructuring System evolved and
detailed guidelines issued by Reserve bank of India on August
23, 2001 for implementation by financial institutions and
banks.
The Corporate Debt Restructuring (CDR) Mechanism is a
voluntary non-statutory system based on Debtor-Creditor
Agreement (DCA) and Inter-Creditor Agreement (ICA). The
CDR Mechanism covers only multiple banking accounts,
syndication/consortium accounts, where all banks and
institutions together have an outstanding aggregate exposure
of Rs.100 million / 10 lakhs and above. It covers all categories
of assets in the books of member-creditors classified in terms
of RBI's prudential asset classification standards. Even cases
filed in Debt Recovery Tribunals/Bureau of Industrial and
Financial Reconstruction/and other suit-filed cases are eligible
for restructuring under CDR. The cases of restructuring of
standard and sub-standard class of assets are covered in
Category-I, while cases of doubtful assets are covered under
Category-II.
SARFAESI Act:
The law did little until it discovered the magnamity of NPA’s
impact on the profitability of the bank. SARFAESI ACT was
formed in Dec’ 2002 based on recommendations of a)
Committee on Banking Sector reforms (Narasimham
Committee Report II) and b) Restructuring of Weak Public
sector Banks (Verma Committee) . This Act aims at speedy
recovery of defaulting loans and to reduce the mounting levels
of Non-performing Assets of banks and financial institutions.
The provisions of the Act enables the banks and financial
institutions to realize long-term assets, manage problems of
liquidity and asset liability disparities and to improve recovery
by exercising powers to take possession of securities, sell
them and reduce non-performing assets by adopting measures
for recovery or reconstruction.
The Act provides three alternative methods for recovery of
non-performing assets,viz;
 Securitization
 Asset Reconstruction
 Enforcement of Security without intervention of the
court
 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com
Securitization:
Securitization implies the issue of security receipt by raising
of funds or receipts by SCs / ARCs. The Securitization
company or Reconstruction company raises from the
Qualified Institutional Borrowers (QIBs) by way of schemes
to acquire funds. They have to maintain proper book of
accounts separately for each and every acquiring assets on the
investments made by QIBs. Qualified Institutional Buyers are
those who have expertise and sound knowledge to evaluate
and make their investment in the Capital Markets.
Assets Reconstruction:
Assets Reconstruction companies buy the NPAs from Banks
and take measures to recover the bad loans amount from the
borrowers and also empower with,
 Proper Management of the borrower business,
 Change of management in the business
 Take Over
 Sale or lease ,
 Restructuring the business of the borrower,
 Rescheduling of the repayments of debts payable by the
borrower ,
 Possession of Secured assets.
 RBI permitted ARCs to convert the debt / outstanding
loans of borrowers in to “ Equities” as a functional
process of restructurings the loan amount of NPAs.
 Shareholding shall not exceed 26% of the post converted
Debt Equity as a reconstruction.
 The companies under equity reconstruction, as a part of
Enforcement of Security interest, the permission given
by Secured Creditors holding should not be less than
60% of the amount outstanding to a borrower as against
75% as on date.
 The amount recovered through this process will used by
ARCs, to reconstruct the company’s management.
Enforcement of Security Assets:
The Act provides notwithstanding anything contained in the
Registration Act 1908, for the enforcement of Security
Interest without Court Intervention. 1) any security receipt
issued by SC / ARC, under sec 7 of the Act, and not creating,
declaring, assigning, any right, or title or interest to or
immovable property except in so far as it entitles the holder of
the registered instrument, or 2) any transfer of security
receipts, shall not require compulsory registration.
Review of the Literature
Gurumoorthy T.R. AND Sufha B, (2012) “Non-
Performing Assets (A Study With Reference To Public
Sector Banks)”,analyzes the classification of loan assets in
PSBs, composition of NPAs in different sectors and NPAs
position in PSBs. In this study, it is observed that PSBs
exercised stringent control measures to reduce the level of
NPAs. The author concludes that Non-Performing Assets
may not turn banks into Non-Performing Banks; instead
steps should be taken to convert Non-Performing Assets into
Now-Performing Assets. As far as old NPAs are concerned, a
bank can remove it on its own or sell the assets to Asset
5220
Management Companies (AMCs) to clean up its balance
sheet. For preventing fresh NPAs, the bank itself should
adopt proper policies.
Balasubramaniam C.S.(2012) in his paper “Non
Performing Assets and Profitability of Commercial
Banks In India: Assessment and Emerging Issues”,
assumes significance with the proposal by RBI to introduce
Basel III norms in the banking sector from January 2013.
Basel III framework of guidelines formulated by Bank for
International Settlements (BIS) in consultation with central
banks operating in a number of countries all over the world
expect the participating banks in their respective economies to
be following healthy financial and operational management
policies. The paper is divided in four parts. The first part
brings out a discussion on the concept of NPA in the
context of identification and control procedures, impact of
NPA on profitability and financial soundness of banks in
general. The second part presents a trend analysis of NPAs
followed by a series of in depth analyses on the high level of
borrowings from banking sector indicating a buildup of
sectoral credit booms in general and also raising concerns
about financial performance and operations of the borrowers.
The third part dwells on the impact of restructuring of
advances by banks on the basis of asset classification. Finally,
certain issues and perspectives/ challenges on the
performance of banking sector and financial stability of the
economy emerge as conclusion.
Rani Chanchal (2013)-International Journal of Research
in Economics and Social Sciences-Evaluation of various
techniques used by the public sector banks for the
management of non performing assets (NPAs)-was
undertaken a study to know the impact of securitisation
legislation in the management of NPAs in selected
financial institutions. To attain this target following banking
institutions operating at their local, regional and zonal levels
have been approached to provide the requisite data and
information. The study reveals that the NPAs have not only
affected the profitability and productivity of the banks and
financial institutions, but also put a stigma on the image of
Indian banking and a drain on the very value system of the
society.
Samir and Deepa Kamra (2013) in their paper “A
Comparative Analysis of Non-Performing Assets (NPAs)
of Selected Commercial Banks in India” analyse the
position of NPAs in selected banks namely State Bank of
India (SBI), Punjab National Bank (PNB) and Central Bank
of India (CBI).It also highlights the policies pursued by the
banks to tackle the NPAs and suggests a multi-pronged
strategy for speedy recovery of NPAs in banking sector.
The study spans the period starting from FY1996-1997 to
FY2009-2010. The authors analyze the trends in NPAs in
terms of values, gross and net NPAs as a percentage of gross
advances and net advances, gross and net NPAs as a
percentage of Total Assets respectively. The paper details
about the sector-wise classification of NPAs, reasons for
their occurrence, the effects of NPAs on banks, and
 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com

frequency distribution of public sector banks by ratio of net SBI, CBI,BOB,CB and PNB. The data used in the present
NPAs to net advances. analysis is confined to the period between the years 2008 to
2014.
Rationale of the Study The data obtained has been analyzed using appropriate
The increase in level of non-performing assets in public sector descriptive and inferential measures specifically testing of
banks alarming the growth and profitability of banking hypothesis.
sectors. RBI have taken many measures to curtail the increase
in level of NPAs in banking sector and implement techniques
to manage the level of growth. Its affects the economic growth Analysis and Interpretations
of the country. Due to increase in NPAs level, the process of
lending also gets pretentious. Proper recovery of loans only Number of Cases of NPAs referred:
will boost the lending and improve the profit growth of the
banks. The implementation of SARFAESI Act 2002, has Year Number of cases Number of cases Number of cases
helped to manage the NPAs level at lower level and it gives referred_Lok referred_DRT referred_
the bankers to breathe free in the recovering process of Adalat SARFAESI Act-
defaulter’s loans without the intervention of court. This study 2002
would try to identify the impact of implementation of 2008- 548308 2004 61760
SARFAESI Act 2002 in Public sector banks like SBI, CBI, 09`
CB, PNB ad BOB. 2009- 778833 6019 78366
10
2010- 616018 12872 118642
Objective 11
The main objective of the paper is to study the measures 2011- 479073 13365 630429
presently followed by Nationalised banks for recovery of 12
NPA’s. It specifically studies and compares the effectiveness 2012- 840691 13408 190537
of recovery methods viz; Lok Adalats, DRT and CDR with 13
SARFAESI Act 2002 . It attempts to study the impact of non- 2013- 1636957 28258 194707
performing assets in nationalised banks in India, and its 14
impact on the economy of the country.

Hypothesis
Ho: There is no incremental growth in the rate of recovery
performance of NPAs in the Public Sector Banks post
implementation of SARFAESI ACT 2002 with reference to
the banks taken for study.
H1:. There is incremental growth in the rate of recovery
performance of NPAs in the Public Sector Banks post
implementation of SARFAESI ACT 2002 with reference to
the banks taken for study.
Ho: There is no significant difference in the cases referred to
recovery channels with reference to the banks taken for study.
H1: There is significant difference in the cases referred to
recovery channels with reference to the banks taken for study .
Dependent Variable: Total Cases Referred
Research Methodology
Source Type III Sum of Squares df Mean Square F Sig.
The method of study adopted in this paper follows a mixed Model 4273131439059.501a 3 1424377146353.167 18.966 .000
approach comprising the qualitative analysis as well as the Act 4273131439059.499 3 1424377146353.166 18.966 .000
quantitative analysis of the data collected from annual report Error 1126519943669.500 15 75101329577.967
of “Reserve Bank of India” publication including “Trend & Total 5399651382729.000 18
Progress of banking in India”, statistical tables related to
banks in India. For qualitative analysis the guidelines issued
by RBI effective to the period of study, articles and papers This is the table that shows the output of the ANOVA analysis
published in different business journals, magazines, and whether it is statistically significant difference between
newspaper, periodicals were studied and data available the cases referred to Lok Adalat, DRT and SARFAESI Act
through credible sources on NPAs recovery and causes have 2002. It is found that the significant level is .000 (p = .000) ,
also been used for analysis. which is below .05 and hence therefore there is statistically
The present study has been conducted to identify and confirm significant difference in terms of average cases referred to
the recovery aspects made in 5 major public sector banks of

5221
 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com

Lok Adalat, DRT and SARFAESI Act 2002. Since, P < .05-It Dependent Variable: Percentage of Recovery
denotes that there is a statistically significant difference in
terms of average cases referred. Source Type III Sum df Mean F Sig.
of Squares Square
(I) Act (J) Act Mean Std. Error Sig.
Difference Model 10886.629a 3 3628.876 14.823 .000
(I-J) Act 10886.629 3 3628.876 14.823 .000
Lok Adalat DRT 803992.333 158220.6577 .00
3* 1 0 Error 3672.158 15 244.811
SARFASI_200 604239.833 158220.6577 .00 Total 14558.787 18
2 3* 1 4
DRT Lok Adalat - 158220.6577 .00
803992.333 1 0
3* This is the table that shows the output of the ANOVA analysis
SARFASI_200 - 158220.6577 .43 and whether it is statistically significant difference between
2 199752.500 1 7 the percentage of recovery through various channels, Lok
0 Adalat, DRT and SARFAESI Act 2002. It is found that the
SARFASI_200 Lok Adalat - 158220.6577 .00 significant level is .000 (p = .000) , which is below .05 and
2 604239.833 1 4 hence therefore there is statistically significant difference in
3* terms of percentage of recovery through various channels,
DRT 199752.500 158220.6577 .43 Lok Adalat, DRT and SARFAESI Act 2002. Since P < .05, it
0 1 7 means there is a statistically significant difference between the
*. The mean difference is significant at the 0.05 level. There is percentages of recovery in terms of Lok Adalat with DRT,
a statistically significant difference between groups by one- Hence H1 is accepted..
way ANOVA. Here, also we have observe that in reference to
DRT and SARFAESI act the “P” value is > .05, that is .437, it
means there is no statistical significant difference in the Multiple Comparisons
average cases referred in DRT and SARFAESI Act. Hence Ho
is accepted. Dependent Variable: Percentage of Recovery

(I) Act (J) Act Mean Std. Sig. 95% Confidence

Difference Error Interval
Amount Recovered through Various Channel: (I-J)
Lower Upper
% of Recovery % of % of Recovery Bound Bound
Year
Lok Adalat Recovery DRT SARFAESI Act-2002 Lok Adalat DRT -25.10* 9.033 .035 -48.57 -1.64
2008-09` 2.4% 81.10% 33% *
2009-10 1.50% 32% 30% SARFASI_2002 -24.40 9.033 .041 -47.87 -.94
2010-11 2.87% 27.89% 37.78% DRT Lok Adalat 25.10* 9.033 .035 1.64 48.57
2011-12 11.80% 17% 23.60% SARFASI_2002 .70 9.033 .997 -22.76 24.17
2012-13 6.10% 14% 27.10%
*
2013-14 6.20% 9.50% 25.80% SARFASI_2002 Lok Adalat 24.40 9.033 .041 .94 47.87
DRT -.70 9.033 .997 -24.17 22.76
Based on observed means. The error term is Mean Square
(Error) = 244.811. *. The mean difference is significant at the
0.05 level.

From the results, it is found that there are significant

differences between the groups as a whole. The above table
Multiple Comparisons shows which is differed from others.
The Tukey HSD post-hoc test is used to observe the means of
the percentage recovery of NPAs through Lok Addalat, DRT
& SARFAESI Act 2002. The p value is .997 both with DDRT
& SARFAESI Act 2002. Since, here P > .05, that means there
is no statistical significant difference between DRT &
SARFAESI Act in respect of average % of recovery with
respect to banks under study. Hence H0 is accepted.

5222
 International Journal of Applied Engineering Research ISSN 0973-4562 Volume 11, Number 7 (2016) pp 5218-5224
© Research India Publications. http://www.ripublication.com
Conclusion
Revolutionary Changes have been made in the Indian Banking
Sector after the liberalization and globalization emerged in the
year 1991. The reforms were like interest rate regulation,
reducing of reserve, prudential norms etc. The Indian banking
sectors was facing with more than Rs. 90000 crores in NPAs
and banks were running under loss of profit due to provisions.
Prior to 1991, the legal process to recover the bad loans was
tiresome, since it takes several years legal civil proceedings
for getting decree.
Indian Banks improved their business and technology to meet
the requirement of the customers at ease and made the
banking systems as friendly user. Though, there is a progress,
bankers are struggling (particularly Public Sector banks) to
reduce their NPAs level to maintain the stability and
profitability in the business.
The increase in the ratio of Non Performance Assets (NPA)
affects the profitability and of the banks, as they have to
allocate provisions for the settlement of NPAs. The Gross
NPAs level of the public sector banks in the year 2012 was
2.94% and increased in 2013 to 3.42% and in the year 2014 it
has further increased to 4.40%.
Under the Recovery of Debts to Banks and Financial
Institutions Act 1993, Debt Recovery Tribunals (DRTs) were
set up for recovery of loans of banks and financial institutions.
This led to speedy recovery of loans in about 1 years’ time as
against the average time of 5 to 7 years required in civil suits.
While initially the DRTs performed well, their progress
suffered as they got overburdened with the huge volume of
cases referred to them.
The formation of the SARFAESI Act has been a benchmark
reform in the Indian banking sector. The progress under this
Act had been significant, as evidenced by the fact that during
2002-03 when the Act came into effect, there was an overall
reduction of non-performing loans to 9.4 per cent of gross
advances from 14.0 per cent inc 1999-2000 to 4.40% in 2014.
When we see the recovery aspects of NPAs in public sector
banks, inspite of having various recovery channels, like Lok
Adalqat, DRT, SARFAESI Act 2002, this study shows that
the perccenatge of recovery of NPAs and number of cases
refreered to these channels, clearly denotes that SARFAESI
5223
Act 2002 and DRT does not have larger variations of
recovering the amount in NPAs. Lok Adalats function by
amicably settling disputes that are pending in a court of law or
at a pre-litigation stage. According to RBI guidelines, banks
can use Lok Adalats to recover loans upto Rs 20 lakh.
Additionally, cases of cheque bouncing as well as motor
insurance disputes are also understood to have been taken up.
Of these, while the SARFESI Act helped recover 80 per cent
of the amount, the lion's share of number of cases were
referred to the Lok Adalat.
The government has to take more effective measures to
constraint the increasing level of NPAs in public sector by
forming strict regulations in the systems. Bankers have to be
trained to recover the loans in a systematic way before it turns
to NPAs category. By proper follow-up, good rapport, having
continuous watching on the movement of borrowers stocks
and assets, proper identification and classification of assets
etc.
The latest recovery proceedings against the Kingfisher
Airlines, Mr. Vijay Mallya, towards the recovery of total
outstanding Rs. 10000 crores ,NPA, DRT (Debt Recovery
Tribunal) restrained from getting Rs. 515 crores that he
received from the sale of the spirits business to Diageo Plc
shows that the government is very much keen to recover the
NPAs by utilizing the available recovery channels like DRT
and SARFAESI Act 2002.
The Kingfisher Airlines, Mr. Vijay Mallya has been identified
as ‘ Wilful Defaulters’ by the bankers like State Bank of
India, United Bank and others.
It shows that recoveries in NPAs are made easier by the
amendments of SARFAESI Act 2002 and open the door for
the bankers to recover their overdue amounts which is been
identified as non performing assets in their books of accounts.
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