NPA recovery: ‘Banks’ internal processes not in sync with external environment’

MUMBAI, JUNE 12

Internal processes in banks have still not caught up with the changes in the external environment relating to the recovery of non-performing loans, said Ashesh Shah, Managing Director, Trans-Continental Capital Advisors Pvt Ltd.

In a conversation with BusinessLine, he said that the IBC framework required a change in the mindset of banks.

“They need to get their ‘origination’ right,” he said. “There are usually enough warning signals for a considerable period of time before an account turns non-performing,” he said.

“There are ratios that provide an indication of the troubles being faced. Banks need to have their loan agreements and covenants much m

ore refined than what prevails currently,” said Shah.

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NPA recovery: ‘Banks’ internal processes not in sync with external environment’

Source: Business Line

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