HYDERABAD: Assocham has urged the government and the Reserve Bank of India to deal with non-performing assets (NPAs) in a flexible and pragmatic way. Stressing that NPAs are a complex issue, it pointed out that any mishandling of the situation would lead to damage of industries and banks.
“Whatever the circumstances, all out efforts will be to resurrect the stressed assets. Only when realistic assessment of NPAs is done and commercial decisions are taken by the banks or other intermediaries without fear of being haunted, that the gigantic problem of NPAs could be resolved,” said Sandeep Jajodia, president of Assocham.
“Once an account is turned into NPA, the avenues for working capital are choked making it difficult for the enterprise. Thus, whatever chances are there for survival and revival of a stressed enterprise or a project are affected, once the working capital requirements are not met,” said Jajodia. He added there are several incomplete projects, especially in the real estate sector, where the developers have run out of cash at a stage where the projects are almost near completion. “For converting a standard account into NPA, the 90 days time frame has to be extended to 180 days,” Jajodia said.