NPAs and Loan Recoveries a Critical Study with Special Emphasis on Insolvency and Bankruptcy Code 2016

Abstract

India witnessed significant growth in the operations of various commercial banks following economic liberalization. However, it was during 1992-1993 that the issue of Non-Performing Assets (NPAs) first came to lime-light, creating confusion and chaos as banks struggled to assess and manage the situation effectively. The severity of the bad debt problem was only recognized in the early 1990s. In response, recommendations from the Narasimham Committee (1991, 1998) and the Verma Committee (1999) led to steps being taken to address the persistent NPA issue. Despite ongoing concerns about reducing NPAs in the balance sheets of banks, particularly Public Sector Banks (PSBs), a systematic approach to resolving the problem remained elusive, with inconsistent NPA norms and lack of agreement on suitable policies. However, the introduction of the Insolvency and Bankruptcy Code (IBC) in 2016 has resolved several challenges related to NPAs. newline