Effective Ways to reduce NPAs 1.

Each bank should set up industrial cell attached to credit department at the corporate level. The cell should analyse the performance of the industries and issue necessary guidelines, industry-wise to branches. Symptoms of dishonesty which can be revealed from the financial statements of the company, securities held vis-a-vis bank finance be read properly. 2. It is essential to have continuous interactions with the key persons of the unit. 3. Setting up of counselling sell at Regional offices and Central office to office required counselling to borrowers. 4. Branch Managers be given adequate support and assistance by the task force consisting of recovery deptt, legal deptt, at Regional and Central office. 5. Timely reminders for overdues to borrowers/guarantors. 6. List of defaulters be put on the notice-board of the bank without giving any details, viz., Account Number, Loan amount, overdues, etc. 7. Friends/relatives and neighbours be contacted to know the whereabouts of the borrowers. 8. Personal contact with the borrowers for knowing the position of the unit, difficulties of the borrowers, etc. 9. Organising recovery camps for agriculture and small advances in the area itself. 10. Incentive to branch by competing in the award of Better Recovery branch for Rural/Semi Urban/ Urban and Metro Centres. 11. Compromise with the defaulters, is one of the measures of recovery. Training to field staff for preparing compromise proposal is given. Delegation be given to the Regional offices in setting the compromise proposal upto a level. 12. In respect of suit filed cases, constant meeting with the local advocates on regular basis is required for follow-up effectively. 13. In respect of defaulters over Rs. 10 lakhs and above, Debt Recovery tribunals are established but their functioning is hampered by litigation at various High Courts. 14. Segregation of NPA accounts according to segment and amount like industrial, SSI, Agri, Small business, traders, professionals etc. And upto Rs. 2 lakhs, Rs. 5 lakhs, Rs. 25 lakhs, Rs. 1 crore and above etc. ABC analysis of such portfolio and prioritizing the same by preparing a list of critical borrowal accounts requiring immediate action. 15. Motivating staff, seeking their positive contribution in renewal of documents, tracing out the defaulters, recovery in overdues. 16. Fixing realistic targets for recovery based on feedback. 17. Intensified monitoring/review of advances. 18. Setting norms for write-off of accounts. 19. The industries rehabilitation norms and procedures are quite rigid and need a review to be streamlined.