Banks typically begin by classifying stressed accounts as Special Mention Accounts (SMA) before declaring them NPAs. Recovery options include loan restructuring, enforcement under the SARFAESI Act, asset auction, or insolvency proceedings through the National Company Law Tribunal (NCLT).
In real estate cases, recovery becomes complex due to ongoing construction, homebuyer claims, and regulatory approvals. Banks often collaborate with asset reconstruction companies (ARCs) to manage distressed assets. Joint Lenders’ Forums (JLF) may also be formed to ensure coordinated recovery action.
Efficient banks NPA real estate recovery strategies focus on project completion rather than liquidation alone. This approach maximizes value recovery while protecting buyers and investors.
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