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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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Non Performing / Stressed Account: Role of Consultants

When an account is high rated and well performing, there are many options and opportunities to the unit and the promoters. The money flows in and there is always a que of investors. New Bankers source various ways and means to take exposure in the account and existing bankers not only try to resist the entry of new lenders but also use every ways and means to increase the exposure. Even the existing consultants use every trick to oust the new consultants and create a mystery curtain around the promoter to safeguard their existence. The money is sourced easily and that is one of the key factor for turning account into stress at a later stage. Promoters start adventuring beyond their capacity and without much analysis. A single wrong business decision spoils the party. This golden situation gradually fades away and the account enters into stress zone. Soon it turns into NPA and then new journey starts.
The consultants and advisors who served such clients in good time are generally not very supportive at this stage. I wish to share my views on the Role of Finance Consultants in case of stressed accounts. The expertise and experience of handling stressed accounts is not very common. Very few Finance consultants enter into such advisory services. The consultant has to associate with such accounts for quite long time as it takes 12-24 months time to resolve such accounts. There are legal, financial and technical issues which hound the units badly. Hence strategy to handle situation is key of the game. Most of the events go unnoticed and the performance of the consultants can not be visualized due to long drawn process. Other side the fee realization is also quite challenging due to stress in the unit. Thus it needs lot of patience to handle such accounts. Unlike the consultancy in sourcing of finance , this advisory of handling stress cases does not bring substantial funding. Only achievement is handling the lenders, working out of strategy to survive and move forward.
The general perception is that consultant is needed to raise finance whereas the fact is that the advisory services are of utmost importance during the crises or stress for that matter. Any step without proper advice may be disastrous for the unit. It is just like we need better doctor or even surgeon when the disease is more crucial. I fail to understand why the promoters of stress units do not think in this direction. To worse the matter, it is noticed that the management of such units become more knowledgeable in the matters of handling legal and financials.
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