Revive and thrive your business
FinLender is India's leading NPA finance company, specializing in providing financial services to clients who are under stress or in a non-performing asset (NPA) status. We have a dedicated NPA Resolution vertical which understands the complexities of NPA. We provide a diverse range of NPA Solutions tailored to your specific needs, whether you need assistance in NPA Retrieval, NPA Takeover, Transfer of NPA accounts, Loan for NPA, NPA OTS Funding or MSME loan for NPA accounts. Finlender is here to guide you every step of the way. With our deep industry knowledge and commitment to delivering results, we empower you to revive your financial health and unlock new growth opportunities. We work closely with our partners (which are registered under RBI and SEBI) to secure NPA Funding options that best suit your requirements. Our NPA Segment collaborates with stressed companies to facilitate Finance for NPA Loan.
We believe in the 4-R Strategy
Recognition
Evaluate and scrutinize notices & related documents received from Financial Institutions.
Resolution
Creating strategy and preparing resolution plans, OTS proposals, and revival plans for your business.
Reform
Helping with the business turnaround, legal charges, and replying to all legal notices.
Recapitalization
Infusing capital and reviving your business.
What is NPA and What Happens when Loan Becomes NPA?
When a loan account in a bank stop yielding/making a profit to the bank, or when a borrower of a particular loan account stops repayments or EMI more than or equivalent to three months, then the bank declares that particular account as an NPA or Non-performing account.
- If the borrower fails to make three consecutive EMI payments, the bank will issue a notice of default (Loan Recall Notice).
- The borrower can choose to negotiate with the bank through a “debt restructuring” process, or the lender can initiate legal action to recover the outstanding amount under SARFAESI Act, 2002.
- In the case of legal action, the lender typically takes possession of any collateral used as security for the loan and initiates liquidation proceedings. This may involve selling assets like factories, houses, or other personal property used as loan security. If the client’s business properties are involved, there is a high risk of complete shutdown.
- The bank’s proceedings, including property notices and auction processes, negatively impact the business’s market reputation. This leads to a decrease in the market value of properties, resulting in business creditors resorting to legal measures to recover their money.
Even if the customer is consistently making timely payments for all their other debts with the same bank, it is possible for all their loans to be categorized as non-performing assets (NPAs). This is because the Reserve Bank of India (RBI) guidelines require banks to classify NPAs at the borrower level rather than on a loan-by-loan basis. To avoid being labeled as a non-performing asset (NPA), the customer must ensure that all their loan repayments are made punctually.
What are the Legal Notices Banks can issue to NPA Account Holders? or What banks will do legally when someone becomes an NPA?
Loan Recall Notice: A Loan Recall Notice is a notification issued by the bank after declaring an account as an NPA (Non-Performing Asset). It requires the borrower to repay the entire outstanding loan amount within a specified timeframe.
Notice 13(2): Under the SARFAESI Act, 2002, the Bank has the authority to issue Notice 13(2) following the demand notice. This notice informs the borrower about the total outstanding amount owed to the bank and provides sixty days for repayment. This stage requires the borrower to address the issue promptly and effectively.
Notice 13(4): Following the 13 (2) notices, the Bank can issue Notice 13(4), often referred to as the “Symbolic Possession Notice,” under the SARFAESI Act, 2002. This notice informs the borrower that the specified assets/properties now legally belong to the bank. The bank may proceed to physically take possession of the asset/property or initiate legal proceedings, such as asset auctions, to recover the outstanding loan amount.
What are the options available to the borrower after being NPA?
Loan Restructuring: The borrower can request their bank to restructure their NPA (Non-Performing Asset) loan. This option provides an extension for repayment, allowing the borrower to enjoy banking facilities.
Legal Remedies: The borrower has the option to approach the respective District or State Debt Recovery Tribunal (DRT) courts to seek additional time for loan repayment and halt the bank’s proceedings.
Refinancing NPA Loan: The borrower can opt for refinancing their NPA loan, which involves paying off the entire outstanding dues to the bank and resolving the issue. The borrower can arrange funds independently or explore financing options available in the market.
OTS (One Time Settlement): If the borrower has the means to repay their NPA loan, they can negotiate a one-time settlement with the bank.
Selling the Collateral: The borrower can pursue two approaches in this regard. Firstly, by selling an asset or property that is not mortgaged with the bank, the borrower can arrange funds independently without involving the bank and repay the loan. Secondly, if the asset or property is mortgaged, the borrower can directly communicate their intention to the bank, expressing their plan to pay off the debt through the sale of collateral.
How we will help you?
- We offer a 3600 solution in strategizing and advising the client from the perspective of the NPA recovery, NCLT Proceedings, and Insolvency Code. Protecting your property and business is our priority.
- Defending and Strategizing Bank Recovery Proceedings and Negotiations.
- Filing or defending insolvency petition before the National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT).
- Restructuring/revival exercise of the corporate debtor, including, preparation or assisting in the examination of resolution plans.
- Initiating/defending proceedings against guarantors/mortgagors of the corporate debtor.
- Advising and facilitating a successful Resolution plan with Resolution Professional.
- Advising clients on various funding and buyout options for revival, restructuring, and resolution plans.
- Advising clients on the different facets of the Internal Restructuring, Bank Negotiations, NCLT, and NPA processes.
- Specialized expertise in funding and structures with extensive knowledge of financial regulations.
We at FinLender help you in raising NPA Funding from our in-house investors (who are registered under RBI/SEBI) who are interested in taking over all the Fund or non-fund-based limits from the company so that you can save your precious property which is acquired by the Bank under SARFAESI Act, 2002.
To obtain further assistance regarding Private finance for NPA Accounts, NPA restructuring, or NPA settlement, NPA funding for NBFCs please consult with our knowledgeable Financial Advisor.
