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Role of Asset Reconstruction Companies (ARCs)
Stressed Accounts: Common Feature
NPA Accounts-Way Forward
Stressed Accounts- Settlement Process
Strategic Debt Restructuring (SDR) Scheme: Overview
CIBIL -Introduction and Importance
Strategic Debt Restructuring (SDR)- Post 2
Distressed Units- Some suggestions to Revive
Non Performing / Stressed Account: Role of Consultants
Stressed Accounts: Challenges in Restructuring/Revival
Stressed Accounts: Role of Promoters' Family
NPA Feature: Excess Non-Productive Investments
CDR Mechanism: Why Failed?
PSBs- Oxygen of Rs. 70 K Crores : Serious Flaw in Banking Structure
Mounting NPAs: What Went Wrong (WWW)?
Mounting NPAs: What Went Wrong (WWW)? Part-2: Development in Banking System
Mounting NPAs: What Went Wrong (WWW)? Part-3: Sudden Growth in Economy
Mounting NPAs: What Went Wrong (WWW)? Part-4: Political Compulsions & Corruption
Mounting NPAs: What Went Wrong (WWW)? Part-5: Overambitions/Greed of Entrepreneurs
Effect of Federal Rate, RBI Actions and Chinese Impact on NPA in India
NPA/Stress : Disease but Not the End
Revival of Stressed Account: Employee Participation
Challenges in Running a NPA unit
Upcoming NPA Scenario: Are Banks going to be Hit Harder again?
NPA: How to Turn Failure into Success
Handling of Defaulting / Stressed Accounts by Lenders: Serious Faults
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Stressed Accounts- Settlement Process

In continuation of my posts in relation to the stressed accounts, I wish to share my views in regard to the settlement and closure of the account
Once an account becomes NPA, the recovery process starts which ultimately leads to the realisation of funds . This is either done by way of auction of properties , realisation of certain assets , recovery from the guarantors and by bringing strategic investor in the company. In every situation the funds so received are adjusted against the loans outstanding . Settlement is a very important process which if not handled properly can cause lot of damages to the borrowers and the guarantors. Most of the settlements are made in parallel with the legal recovery process. Also if the settlement is not worked out properly , the amount deposited initially may be a sheer waste. Hence over commitment can be very dangerous . Also while doing settlements it must be ensured that it relieves the promoter from any future liabilities too. Value of intangible assets and business potentials should also be taken into consideration. We should be well aware about the maximum time available in settlement.
Since the legal process of recovery can be too long, it needs to be considered that both sides get affected in delaying the settlement .
These days ARCs are also useful for settlement and can play a fruitful role.
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