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Recovery Management Process of Indian Commercial Banks - A Special Reference to Non-Performing Assets

Author

Listed:
  • Sahoo, Manoj Kumar

    (Sambalpur University, Odisha.)

  • Majhi, Muralidhar

    (School of Economics, G. M. University, Sambalpur, Odisha.)

Abstract

The best indicator of the measure of the health of the banking industry in a country is its volume of NonPerforming Assets (NPAs). The increasing number of NPAs in commercial banks is a major concern in India. The best solution to reduce the volume of NPAs depends on good management of recovery mechanisms. The present context of research focuses on the recovery mechanism of NPAs with three important legal measures. Most of the cases are being negotiated and monitored through Lok Adalats in order to reduce the burden of those assets which cease to generate revenue. In addition to this, there is Debt Recovery Tribunals mechanism (DRTs), which focuses on diminishing the balance of NPAs. However, the third measure includes Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFAESI Act), which allows banks to curb NPAs. The entire study is based on secondary data and SPSS is used to analyze the data. The study revealed that there is a statistically significant difference between the number of cases referred to the recovery mechanisms and the amount recovered through various recovery channels.

Suggested Citation

  • Sahoo, Manoj Kumar & Majhi, Muralidhar, 2020. "Recovery Management Process of Indian Commercial Banks - A Special Reference to Non-Performing Assets," International Journal of Banking, Risk and Insurance, Publishing India Group, vol. 8(2), pages 27-34, September.
    • Handle: RePEc:ris:ijbrix:0006
    as

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    More about this item

    Keywords

    NPAs; Recovery Mechanism; DRT; Lok Adalats; SARFAESI Act;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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