There has been a lot of focus on 𝐧𝐨𝐧-𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐢𝐧𝐠 𝐚𝐬𝐬𝐞𝐭𝐬, 𝐨𝐫 𝐍𝐏𝐀𝐬, 𝐢𝐧 𝐈𝐧𝐝𝐢𝐚. Gone are the days when people used to borrow huge amounts of money in the name of business expansion and escape without repaying it. Today, NPA control and 𝐍𝐏𝐀 𝐌𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭 are the key activities carried out by banks and financial institutions. There is a close check on the borrowers, regular payers, and defaulters.
As per the guidelines and norms given by the 𝐑𝐞𝐬𝐞𝐫𝐯𝐞 𝐁𝐚𝐧𝐤 𝐨𝐟 𝐈𝐧𝐝𝐢𝐚, there has been a significant improvement in the process of recognizing and provisioning weak assets.
When a company or individual fails to pay up, due to whatever reason, things go wrong on the financial institution’s part. Sometimes, the reason behind non-payment is genuine and real. But sometimes, it is just intentional and deliberate.
Despite having the capability of repaying the loan, they do not pay. Such an act is called a willful default. Getting money recovered from such defaulters would be very difficult. Sometimes, it involves a very long battle.
𝐁𝐮𝐭 𝐭𝐡𝐞 𝐪𝐮𝐞𝐬𝐭𝐢𝐨𝐧 𝐢𝐬: 𝐡𝐨𝐰 𝐢𝐬 𝐚 𝐜𝐨𝐦𝐩𝐚𝐧𝐲 𝐨𝐫 𝐢𝐧𝐝𝐢𝐯𝐢𝐝𝐮𝐚𝐥 𝐝𝐞𝐜𝐥𝐚𝐫𝐞𝐝 𝐚 ‘𝐰𝐢𝐥𝐥𝐟𝐮𝐥 𝐝𝐞𝐟𝐚𝐮𝐥𝐭𝐞𝐫’? 𝐖𝐡𝐚𝐭 𝐢𝐬 𝐢𝐭𝐬 𝐢𝐦𝐩𝐚𝐜𝐭 𝐨𝐧 𝐍𝐏𝐀 𝐦𝐚𝐧𝐚𝐠𝐞𝐦𝐞𝐧𝐭?
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