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Assocham seeks easing of NPA norms of NBFCs

BS Corporate Bureau

The Associated Chambers of Commerce and Industry of India has urged the government to ease the norms regarding non-performing assets at times of difficulties faced by non-banking finance companies during natural calamities.

"NBFCs faced serious problems in recovering the structured and scheduled dues from their customers after the incidence of natural calamities in Gujarat, Orissa and Andhra Pradesh," Assocham said in a representation made to the government recently.

There should be adequate rescheduling of certain terms and conditions of the existing agreement between the banks and customers, where natural calamities impair the repaying capacity of the borrower, it said in its representation.

The chamber said that the mode of classification of assets that get affected due to natural calamities could be suitably allowed to be classified on the basis of nature or category.

Assocham said that the present norms of non-performing assets are too stringent and need to change.

The chamber added that the standard time-frame for terming a loan as non-performing assets should be increased by one-quarter.

At present, an account is treated as an non-performing assets if the borrower commits any default in payment of instalment and interest in two-quarters of four quarters and should be increased to three quarters, the chamber has said.

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