02-08-2013, 02:01 PM
Stressed Assets of Banks: Legal Initiatives and Impacts
Abstract
The recovery of stressed assets or Non-performing Assets (NPA) through legal and regulatory recourses is critical to the sustainability of banks. In the past fifteen years, policymakers have been experimenting with several legislations to improve the recovery mechanism in banks. An important fall out of these stringent measures is that the defaulters have realized that one-time settlement with lending banks is more beneficial than resorting to litigation which has less chances of success as more favorable legislations for banks are in place. This paper revisits the various legislations and regulations that address the recovery of NPAs and evaluates their impact on recovery performance of banks.