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Non-Peforming Assets (NPA)

NPA is a classification used by financial institutions that refer to loans that are in jeopardy of default.

In recent years we saw a sharp increase in the level of Non Performing Loans (NPL) in the Banking system triggered mainly by the effects of the economic crisis but also emphasized by other internal and external factors.

Aggressive budgeting is seen as the most important internal factor contributing to the increase of the NPA.This seems to be affected in business loans.

Non Performing Assets
Objective

The objective is to ensure timely and transparent mechanism for restructuring the debts of potentially viable entities facing problems for the benefit of all concerned. In particular, the framework will aim at preserving viable entities that are affected by certain internal and external factors and minimize the losses to the creditors and other stakeholders through an orderly and coordinated restructuring programme.

Restructuring is applicable to entities which are viable or potentially viable:

  • Project plan by the entity with appropriate projection covering losses due to NPA.
  • Process

    The restructuring package shall be worked out and implemented within a maximum period of 90/120 days as the case may be from the date of receipt of request.