If you have a loan of Rs 1 crore and above or are planning to apply for one, chances are that your financial portfolio will be under the constant supervision of your bank.
Hit by a rise in the level of bad assets in the current fiscal year, banks have started the process of screening all loans above Rs 1crore on a daily basis besides ensuring that all know your customer norms are adhered to.
A senior management team headed by the bank chairman will look into all fresh disbursals while assessing performances of existing loans. This is in addition to internal committees set up by banks to keep a watch on the same.
The government has asked banks to prepare regular reports on non-performing assets (NPAs) or bad loans. The issue was also brought up during a recent meeting between finance minister P Chidambaram and public sector bank chairmen.
“We are screening all loans of Rs 1 crore and above on a daily basis to ensure that the situation is well under control,” TM Bhasin, chairman and managing director, Indian Bank, told HT.
Several banks in India including the State Bank of India and Canara Bank posted huge increase in NPA levels between 2011 and 2013, according to online portal NPAsource.com. Banks have implemented a tough recovery process to prevent defaults including publishing photographs of willful defaulters and their guarantors.
“Banks are focused on managing NPA and there is no reason for any alarm,” said M Narendra, chairman and managing director, Indian Overseas Bank.