Central Bank of India have decided to put non-Performing assets(NPA) worth Rs 3,300 crore on sale under the SARFESI Act.These assets are also under the National Company law tribunal(NCLT) resolution process.
Non-performing assets(NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days.Banks are required to classify NPAs further into (a)Substandard assets: Assets which has remained NPA for a period less than or equal to 12 months (b)Doubtful assets: An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months and (c)Loss assets:Loss asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted, although there may be some salvage or recovery value.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002,allows banks and financial institutions to auction properties (residential and commercial) when borrowers fail to repay their loans.It enables banks to reduce their non-performing assets (NPAs) by adopting measures for recovery or reconstruction.
National Company Law Tribunal (NCLT) is a quasi-judicial body that governs the companies in India.It was established under the Companies Act, 2013 and is a successor body of the Company Law Board.
NCLT has the same powers as assigned to the (a)erstwhile Company Law Board (which are mostly related to dealing with oppression and mismanagement) (b)Board for Industrial and Financial Reconstruction (BIFR)(revival of sick companies) and (c)powers related to winding up of companies (which was available only with the High Courts