Abstract

Resolving Non-Performing Assets (NPAs) is a significant task for financial institutions, affecting the landscape of financial stability and economic vibrancy. This study attempts to examine the complexities of NPAs in the Indian banking sector, providing a thorough examination of the underlying difficulties, regulatory frameworks, resolution procedures, and case studies. The introduction highlights the relevance of NPA resolution in the context of India's financial system, emphasizing significant figures and the need for proactive efforts to reduce NPA proliferation. The study goals underline the importance of understanding the concept of nonperforming assets (NPAs), recovery techniques, and their impact on the Indian economy. The following sections go into detail on NPAs, including their forms, effects on the economy and borrowers, and the reasoning behind banks' decisions to write off loans. Regulatory frameworks for NPA resolution are investigated, including the Narasimham Committee's recommendations and RBI guidelines. Various NPA resolution methods are examined, including Asset Reconstruction Companies (ARCs), One-Time Settlements (OTS), Debt Recovery Tribunals (DRTs), and the planned formation of a "bad bank." Case studies provide real instances of successful NPA remedies, demonstrating the effectiveness of legal systems in promoting financial recovery. Measures for addressing and managing NPAs are outlined, highlighting the critical role of regulatory agencies in creating standards, checking compliance, and providing assistance. Banks' NPA resolution strategies, both preventative and reactive, are thoroughly scrutinized to determine their effectiveness in minimizing NPA risks and enabling recovery efforts. Finally, the study highlights the multiple characteristics of NPA resolution, calling for an integrated strategy in financial institutions, regulatory authorities, and legal frameworks. Embracing best practices in risk management and sustainable banking is critical for determining the complexity of NPA resolution and improving the financial ecosystem's stability and robustness.

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