As per the recent press report it is seen that the banks are facing a challenge of rising nonperforming assets (NPA) and the difficulty to recover them. Recently the State Bank of India has been downgraded by the Moody credit rating agency on this regard where the gross nonperforming assets grew to 3.52 per cent and the bank’s capital adequacy ratio which has to be 8 per cent came down to 7.6 per cent. This is the case most of the banks are being affected where there has been increase in NPAs and failure to recover them through Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFRAESI) Act.
The Government measure to recover the bad loans exceeding Rs. 10 lakh due to banks and financial institutions known as Debt Recovery Tribunal (DRT) has also turned crooked. The DRT is anticipated to dispose of the cases within maximum of six months but in reality it takes years to recover those bad debts. Some reasons behind this delay would be increased number of cases handled by the DRT, the posts of officers are vacant for a long time and thereby resulted in pending of many cases and so on.