The Indian banking sector is facing an NPA problem, which is one of the crucial challenges faced by the banking sector. It is essential to take precautionary measures to manage and control the NPAs, because they affect the balance sheet of the banks. Banks have to face many risks like credit risk, operational risk, market risk, etc. One of the important risks is credit risk, the five Cs: character, capacity, capital, collateral and conditions. Proper credit evaluation measures are essential to control the NPAs. Before lending the loans to the borrower, it’s essential to measure the creditworthiness of the borrower.
The research study aims to understand the root causes of NPAs, current trends of gross and net NPAs of SCBs, and Government initiatives to recover NPAs. There are many recovery channels like Lok Adalats, DRTs, SARFAESI Act, 2002, and IBC 2016. The paper focuses on new recovery channels introduced by the Government and their effectiveness in managing the NPAs of SCBs