For NPA settlement, MSME borrowers can deposit old notes in loan accounts: Banker

Bengaluru, Dec 7 (KNN) Some banks are seeing demonetization as a good chance to recover from Non-Performing Assets (NPAs) in the MSME sector by coming out with one-time settle schemes or schemes to deposit in old currency notes in their loan accounts.

In an interview to Business Line, Managing Director & CEO of Canara Bank said “There is a good chance of recoveries during this period in Non-Performing Assets (NPAs) and we are coming out with various one-time settlement (OTS) schemes to mobilise more.”

“Post demonetisation, we are talking to borrowers for NPAs settlement. In case they have old notes, they can be deposited in their loan accounts. I feel it will help improve the recovery rate,” he said.

“Initially, collection under demonetisation was slow because of some uncertainty. Now after RBI’s clarification and after it allowed exchange of old notes of Rs 500 and Rs 1,000, things are improving,” Sharma told Business Line.

The bank chief expects good growth in MSME advances in Q4.

“As far as NPAs are concerned, as they mainly deal in cash, they are affected,” Sharma said.

For many units where instalments are due, they are being extended concessions as per RBI norms. “Although it is not restructuring, it will help us in reducing the pressure on NPA advances and once the economy is back on track, by January, everything will likely be normal,” he added. (Courtesy: Hindu Business Line)