Property Worth Rs 2.3 L Crore Seized to Recover NPAs in Last 3 Years
Borrowers who are relaxed after borrowing loans from the banks should now be warned as the bankers have fastened the process of seizing property in the case of NPAs. The agencies have seized over 1.7 lakh properties whose market value is over Rs 2.3 lakh crore from the NPA accounts in the last three fiscals, the govt told in Parliament on Monday.
Junior Finance Minister Anurag Thakur said in a reply to a question in the Lok Sabha that these properties have been seized through Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, Debts Recovery Tribunals, and National Company Law Tribunal among others.
He further added that there are other 64,400 properties related to the NPA account which have not been taken over due to a variety of factors such as the nature of the loan, the nature of the security, the judicial process, etc.
The Public Sector Unit (PSU) banks have also collected Rs 3.35 lakh crore over the last four and a half fiscal years, including a record recovery of Rs 1.27 lakh crore during 2018-19 fiscal. In the last fiscal, approximately Rs 70,000 crore of loan recovery resulted.
The banks-especially the PSU banks in India has been coping with the load of NPAs, reaching as high as Rs 10 lakh crore. As a result, this load has reduced the banks’ capacity to lend and make profits.
Apart from that, the compensation to these losses is also done by the banks in the form of provisioning, which marks an additional burden to the banks’ rolling profits. Recovery of these bad loans is possible to leave more cash with banks expanding their businesses.
After the RBI urged lenders to identify NPAs in their books, banks have seen a spike in their bad debt. As of March 31, 2019, the total NPAs of banks reached Rs 9.4 lakh crore. Due to the continuing decline in the economy, companies are getting it difficult to repay their debt.
Many borrowers have repaid their dues as IBC was put into effect.
It is worth to mention here that that government and the regulator have exercised various steps including the execution of the IBC and encouraging SARFAESI to support the recovery of bad debt.
The record number of NPAs had pushed many public sector banks into losses, forcing a huge refinancing of banks.
Sources: Google
