What Happens After NPA?

Fundsourceindia20 Sep, 2023Finance

When a loan account or borrower slips into the NPA, he faces multiple issues from the banks like financial restrictions, immediate demand of a total loan outstanding, and legal process to recover the loan from the borrower. All this makes the borrower unable to run the business in a proper manner and puts up pressure to confront the bank financially & legally. A bank is a legal body with a lot of legal support from the government to ease the recovery of their loans. Banks are equipped with the SARFAESI Act which enables them to sell or auction the borrower?s properties/assets in the event of default to recover their loan without any intervention from the courts. Following are the consequences that can be faced after the NPA.