3) Today most of the banks are focusing on recovery of Non-Performing Assets (NPAs). A large chunk of banks money is locked in these assets. Major defaulters are intentional who plan to defraud the bank and run away. The other type of defaulters are those, who because of circumstances or due to some inability are unable to repay the bank loans. Banks have to make huge provisions for NPAs, which reduce the profitability of the banks. However, new legislations have been passed expediting recovery process but more needs to be done. In light of above statements:

a) Write the major steps taken for recovery since last 10 years( 5 marks)

b) How do you differentiate between intentional defaulters and ability defaulters, and the view of RBI on these two category of defaulters?(5marks)

Subject -commerical banking