Legal Remedies for Non-Performing Assets (NPAs) in India: An Assessment of Enforcement and Recovery Mechanisms

Non-Performing Assets (NPAs) remain a critical challenge in India’s banking sector, affecting credit flow, profitability, and financial stability. This paper assesses the effectiveness of legal remedies such as the SARFAESI Act, Debt Recovery Tribunals (DRTs), Insolvency and Bankruptcy Code (IBC), Lok Adalats, and Asset Reconstruction Companies (ARCs) in resolving NPAs. It also examines enforcement challenges, sector-specific issues, and the role of regulatory bodies like the RBI and Government of India. The study highlights the need for judicial reforms, inter-creditor coordination, and institutional strengthening to improve recovery outcomes and ensure a more robust, efficient, and accountable financial ecosystem.