The revised guidelines will cover all NPAs in all sectors irrespective of the nature of business, which have become doubtful or loss as on March 31, 2000, with outstanding balance of Rs 10 crore and below on the cut-off date, RBI said in a notification issued to chairmen and managing directors of these banks on Wednesday.
The new guidelines would also cover the NPAs classified as sub-standard as on March 31, 2000, which have subsequently become doubtful or loss and those on which the banks have initiated action under the Secu-ritisation and Reconstruction Act. However, cases pending before courts, debt recovery tribunals, and Board for Industrial and Financial Reconstruction could be brought under this scheme, subject to consent decree being obtained from the respective court or institution, the central bank said.
The last date for receipt of applications from borrowers would be as at the close of business on April 30, 2003, and the processing under the revised guidelines should be completed by October 31 this year, RBI said, adding the guidelines will not, however, cover cases of willful default, fraud and malfeasance. The banks should identify such cases and initiate prompt action against them.
The norms were issued by revising the guidelines set out in the RBI circular of July 27, 2000 issued for its earlier scheme.
The minimum amount that should be recovered under these norms for doubtful or loss as on March 31, 2000, would be 100 per cent of the outstanding balance in the account as on the date of transfer to the protested bills account or the amount outstanding as on the date on which the account was categorised as doubtful NPAs, whichever happened earlier, as the case may be. For accounts classified as doubtful or loss after March 31, 2000, the minimum amount to be recovered includes interest also at the existing prime lending rate from April 1, 2000 till the date of final payment.
The banks should follow the above guidelines, without discrimination and a monthly report on the progress and details of settlements should be submitted by the concerned authority to the next higher authority and their central office.
Any deviation from the above settlement guidelines for any borrower should be made only by the board of directors. All the banks should uniformly implement these guidelines, so that maximum realisation of dues is achieved from the stock of NPAs within the stipulated time, RBI said.