Lok Sabha Question No. 1558 (UNSTARRED), answered on 2019-07-01
Subject: NPA Accounts
Ministry: FINANCE
Asked by: Manish Tewari

## GOVERNMENT  OF INDIA MINISTRY  OF FINANCE DEPARTMENT  OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO: 1558 TO BE ANSWERED ON THE 1 st  JULY, 2019/ASHADHA 10, 1941  (SAKA)

## NPA Accounts

## 1558:  SHRI MANISH  TIWARI:

Will  the Minister  of FINANCE  be pleased to state:

- (a) the criterion  fixed by  the Government  for classifying  an account  as a Non  Performing Asset (NPA);
- (c) the  details   of  accounts   that   have  been  classified   as  NPAs   as  on  31st  March,   2019 including  their  promoters,  bank/company-wise; and
- (b) the number  of times  this  criterion  has amended/changed  during  the past five years;
- (d) the  details   of  legal/recovery proceedings   that   has  been  initiated   by   the  respective public/private  sector  banks  to recover  amount  from  such NPAs?

## ANSWER

(a) and (b): In terms  of Reserve  Bank  of India (RBI)'s master  circular  dated 1.7.2015  on Prudential  norms  on Income Recognition,  Asset Classification and Provisioning  pertaining to Advances,  an asset becomes non-performing  when  it ceases to generate  income  for the bank.  As per the circular,  a non-performing  asset (NPA)  is a loan  or an advance  where -

## To be answered by FINANCE  MINISTER (S mt. Nirmala  Sitharaman)

- (a) in  respect  of  a  term   loan,   interest   and/or   instalments   of  the  principal   remain overdue  for a period  of more  than  90 days;
- (c) in respect of bills  purchased  and discounted,  the bill  remains  overdue  for a period of more than  90 days;
- (b) in respect  of an Overdraft/Cash Credit,  the account  remains  'out  of order';
- (d) in  respect   of  agricultural loans,   the  instalment   of  principal   or  interest   thereon remains  overdue  for-
- (ii) for one crop season for long-duration  crops.
- (i) two crop seasons for short-duration  crops,  and
- (e) the  amount   of  liquidity facility   remains   outstanding   for  more   than   90  days,   in respect of a securitisation transaction;
- (f) in respect of derivative  transactions,  the overdue  receivables  representing  positive mark-to-market  value  of a derivative  contract,  if these remain  unpaid  for a period  of 90 days  from  the specified  due date for payment.

RBI  has  informed   that   the  criteria   for  classifying   an  account   as  NPA   have  not  been amended or changed  during  the past five years.

(c): As per RBI input,  the account-wise  information  and information  on promoters  Bank company-wise  is not centrally  maintained  with  it.  RBI has further  informed  that  in terms  of Section   45E  of  RBI  Act,   1934,  RBI  is  prohibited   from   disclosing   credit   information at bank/borrower   level.   Bank-group   wise   number   of  unique borrowers   with   exposure of Rs. 5 crore  and above,  whose  loan  accounts  were  classified  as NPA  as on 31.3.2019,  as intimated  by  RBI, are as under:

| Bank group                     | Number of unique borrowers   |
|--------------------------------|------------------------------|
| Public Sector Banks            | 6,699                        |
| Private Sector Banks           | 1,859                        |
| Foreign Banks                  | 220                          |
| Small Finance Banks- Scheduled | 6                            |

(d):  Steps  taken   to  expedite   and  enable resolution   of  NPAs   and  recovery   from   NPA accounts,  include, inter-alia , the following:

- (2) Securitisation and Reconstruction  of Financial  Assets and Enforcement  of Security Interest  Act  has been amended  to make  it more  effective,  with  provision  for three months'  imprisonment  in case the borrower  does not provide  asset details  and for the lender  to get possession of mortgaged  property  within  30 days.
- (1) The  Insolvency   and  Bankruptcy Code,   2016  (IBC)  has  been  enacted,   which   has provided  for taking  over the management  of the affairs of the corporate  debtor  at the outset  of the corporate  insolvency  resolution  process.  Coupled  with  debarment of wilful  defaulters  and persons associated  with  NPA  accounts  from  the resolution process, this has effected a fundamental  change in the creditor-debtor  relationship. In terms  of RBI's circular  dated 7.6.2019 on 'Prudential  Framework for Resolution of  Stressed  Assets'  complete   discretion   has  been  given   to  lenders   with   regard   to design and implementation of resolution  plans,  while  providing  for  disincentives  in the form of additional  provisioning  for delay  in implementation of resolution  plan or initiation of insolvency  proceedings.
- (3) Suits for recovery  of dues are also filed by  banks  before Debts Recovery  Tribunals. Six new Debts Recovery  Tribunals  have been established  to expedite recovery.
- (4) Under  the PSB Reforms  Agenda,  PSBs have created  Stressed Asset Management Verticals   to  focus  attention   on  recovery,   segregated   monitoring from  sanctioning roles  in  high-value   loans,   and  entrusted   monitoring of  loan   accounts   of  above Rs. 250 crore  to specialised  monitoring  agencies for clean and effective monitoring, and  created   online   end-to-end  One-Time   Settlement   platforms   for timely   and better  realisation.

Enabled by the above steps,  Scheduled   Commercial Banks  have  recovered   Rs.  4,51,857 crore   over  the  last  four   financial   years,   including   record   recovery   of  Rs.  1,50,789 crore during  2018-19.

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