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Banks Repayment
5th Nov 1998 Vivek Malpani @indrayani.com
With the slowing of economy, several accounts with banks (Term Loan accounts) are in difficulty and are unable to pay the installments. Any suggestions on how banks treat these accounts and if there is any best way to beat the debt trap? One time settlement by sale of assets, Rephasing of loan with interest holiday(as done to most BIG names/groups in industry though unheard of for small fries), any site or consultants(negotiators) in Mumbai? RBI directives to banks? My two close friends need help on these lines. Please write ideas. vivek malpani [email protected]
6th Nov 1998
Core Management @del2.vsnl.net.in
Dear Mr.Malpani, This is a routine affair for banks, ofcourse the default will be on higher side when market conditions are bad. With the slowing of economy, several accounts with banks (Term Loan accounts) are in difficulty and are unable to pay the installments. Any suggestions on how banks treat these accounts and if there is any best way to beat the debt trap? ---Banks treat overdue accounts as NPA (Non-performing assets) as at the end of each financial year and make provision for bad debts depending on the period of overdue in respect of principal amount and interest. Ideas for beating the debt trap? Sorry, I am no better than you. One time settlement by sale of assets, Rephasing of loan with interest holiday(as done to most BIG names/groups in industry though unheard of for small fries), any site or consultants(negotiators) in Mumbai? RBI directives to banks? ---RBI gives only broad guidelines in respect of rephasing of loans. Individual banks decide such cases depending on facts of each case like chances of revival / recovery, security available, past experience with the borrowers, standing of the guarantors(whether they are financially sound to pay). Hence, no definite guidelines applicable to all loans and all banks will available. K M Bhat Core Management New Delhi
