Classification of NPA
Ajay
(Querist) 03 October 2010
This query is : Resolved
i want to know when a account become NPA.i was enjoying working capital limit with bank and paying interest within stipulated norm.Bank ask us to reduce the limit and we also agree and made and agreement to reduce Rs.80000per month.All of sudden recesion start on 2008 september,i requested bank to defer my reduction in limit for 6month as i could not pay.But did not agree to my request.After 4 month they classified my account as NPA.Can bank do it for reducing limit,where as exisitng loan interest was giving within normal period.
further after classyfying our account NPA on 29th December they took interest also from us,they took instalment also in december,february,march also.under above circumstances can we challenge in court that our account is not NPA
Devajyoti Barman
(Expert) 03 October 2010
Yes , if the bank did not adhere to the guidelines set for declaring an account as NPA then you could challenge the same in DRT.
Ajay
(Querist) 03 October 2010
i want to know whether my account is NPA or not?
DEFENSE ADVOCATE.-firmaction@g
(Expert) 03 October 2010
Difficult to get any relief at DRT , but you should raise counter claim for damages and go on shooting notices to every one who participates in any auction to scare them away.
If notice u/s 13 (2) it is the best opportunities to raise as many issues as possible against the lender and if they do not address to them within seven days than you can expect relief for quashing the notice.
s.subramanian
(Expert) 03 October 2010
Classification as NPA does not put an embargo upon the right of the bank to receive the loan dues when paid. On the other hand it cannot refuse to receive. Just because the dues are received, your account does not lose the status of NPA. It is more a banking procedure.
Parthasarathi Loganathan
(Expert) 03 October 2010
Yes, NPA classification is based on prudential accounting norms which is in now way protect the borrower to shield from his repayment obligation. Please take up for rephasement of repayment schedule and banks have considered many cases if found genuinely affected by recession. Author duty is to the repay the loan without worrying too much as to whether his account is NPA or not.
VENKATRAMAN SHRINIVAS
(Expert) 04 October 2010
I totally agree with Mr.Parthasarathy. Banks resort to BPA classification solely to protect their image.They accord NPA on the basis of their own norms of repeated defaults. If an asset is treated as NPA, they can eliminate it from the probable asset that can secure profits for the bank. If the NPA asset is taken under normal course, it would project a dismal performance by the bank. It is more artificially to boost their image that BPA is resorted. Still you can continue to make regular payments and activate your account.
