NPA Finance- Your Partner in Recovery
NPA Finance refers to the range of funding and financial restructuring solutions designed specifically for accounts that have turned into Non-Performing Assets. These are loans or advances where the borrower has stopped making interest or principal repayments for a specified period, typically 90 days. Once classified as NPAs, these assets adversely affect the lender's balance sheet, profitability and credit rating.
NPA Finance enables companies and promoters to raise funds against such stressed or defaulting assets, helping them restructure liabilities, revive operations and restore financial stability.
Why is NPA Finance Important?
1.Business Revival & Continuity:
NPA Finance provides companies with the much-needed liquidity to resume operations, settle overdue payments and manage working capital needs without waiting for long legal resolutions.
2.Asset Value Protection:
Timely funding and restructuring can help maintain the intrinsic value of stressed assets, preventing distress sales or liquidation at low valuations.
3.Banking Sector Stability:
Effective NPA management ensures that banks and NBFCs can reduce bad debts and free up capital for fresh lending, thereby improving credit flow in the economy.
Key Solutions under NPA Finance
1. Stressed Asset Funding
Stressed Asset Funding involves providing fresh credit lines or term loans to companies whose assets have turned NPA. This helps in reviving operations, upgrading plant & machinery, clearing statutory dues and restarting revenue-generating activities.
2. Debt Restructuring & Settlement Solutions
Debt restructuring allows borrowers to renegotiate the terms of their loans, including interest rates, repayment tenure and principal amounts. One-Time Settlement (OTS) schemes also enable borrowers to settle dues by paying a negotiated amount, often at a discount, thus closing NPA accounts amicably.
3. Private Equity (PE) Investment in Stressed Accounts
For viable businesses with potential for turnaround, private equity funding can provide long-term capital infusion. PE funds or distressed asset investors acquire equity stakes or convertible instruments in companies to support operational revival and future growth.
4. Asset Reconstruction & Securitization
Asset Reconstruction Companies (ARCs) purchase NPAs from banks and financial institutions at a discounted price. They then restructure these assets or recover dues through strategic resolution plans, providing relief to both lenders and borrowers.
NPA Help’s Role in NPA Finance
NPA Help is India’s leading NPA finance solutions provider, specializing in assisting clients facing financial stress or whose accounts have been classified as Non-Performing Assets (NPA). With a dedicated NPA Resolution division, we deeply understand the complexities of NPAs and offer a comprehensive range of tailored solutions.
Whether you need assistance with NPA Retrieval, NPA Takeover, Transfer of NPA Accounts, Loan for NPA, NPA OTS Funding, or MSME Loans for NPA accounts, NPA Help is here to support you at every step. Backed by deep industry expertise and a results-driven approach, we empower you to regain financial stability and unlock new growth opportunities.
Our trusted partnerships with institutions registered under the RBI and SEBI allow us to secure optimal NPA funding solutions. Our NPA division works closely with distressed companies to facilitate financing for NPA loans and ensure business continuity.
What Is NPA and What Happens When a Loan Becomes NPA?
When a borrower fails to make EMI payments for 90 days or more, the loan account is classified as an NPA (Non-Performing Asset) by the bank. Here’s what follows:
- The bank may issue a Loan Recall Notice, demanding repayment of the full outstanding amount.
- The borrower can attempt a debt restructuring or the bank may initiate recovery under the SARFAESI Act, 2002.
- If legal action is taken, the bank can take possession of pledged collateral (like business assets, homes, or machinery) and begin auction proceedings.
- These actions can severely damage the business's reputation and reduce asset values, triggering creditor action and potential business shutdown.
- As per RBI guidelines, if one loan turns NPA, all loans under the same borrower may be classified as NPAs even if other EMIs are up to date.
To avoid this, timely repayment of all loans is essential.
What Legal Notices Can Banks Issue to NPA Account Holders?
1. Loan Recall Notice
Issued once an account becomes an NPA, demanding full repayment within a specific time.
2. SARFAESI Notice 13(2)
This notice gives the borrower 60 days to pay the total outstanding amount before the bank takes further legal action.
3. SARFAESI Notice 13(4)
Known as the Symbolic Possession Notice, this informs the borrower that the bank now holds legal rights to the mortgaged asset. The bank may proceed with possession or auction.
What Are the Borrower’s Options After Becoming NPA?
Loan Restructuring
Request the bank to extend repayment terms and restructure the loan.
Legal Remedies
File petitions with DRT (Debt Recovery Tribunal) to delay recovery actions and request additional time.
Refinancing NPA Loan
Raise funds independently or seek market-based financing to clear bank dues and resolve the NPA status.
One-Time Settlement (OTS)
Negotiate a lump-sum repayment agreement with the bank to settle the loan.
Selling Collateral
Sell unencumbered property or negotiate with the bank to sell mortgaged assets for loan repayment.
How NPA Help Supports You
We offer a 360° solution for clients navigating NPA recovery, insolvency and legal proceedings. Our services include:
- Defending and negotiating in bank recovery proceedings.
- Filing or responding to insolvency petitions in NCLT and NCLAT.
- Structuring or assisting with resolution plans for stressed businesses.
- Legal support against actions taken against guarantors or mortgagors.
- End-to-end assistance with revival, restructuring and debt resolution.
- Expert advisory on funding options, private finance and buyouts.
- In-depth knowledge of financial regulations, funding structures and compliance.
NPA Help also connects clients to in-house RBI/SEBI-registered investors ready to take over fund-based and non-fund-based limits, helping protect assets seized under the SARFAESI Act.