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

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