CAUSES FOR OVERDUES / NPA:

CAUSES FOR OVERDUES / NPA

Some of the causes for over dues are

1.   Appraisal not proper: It refers to

a.   Over financing or under financing

b.   Ignorance of technical feasibility and economic viability

c.   Delay in taking decision

d.   Faulty repayment programmed

2.   No proper identification of borrower: It refers to

a.   Improper identification of borrower activity

b.   Bonafides and abilities not assessed

c.   No direct contact between the banker and borrower

3.   No proper disbursal of loans: It means untimely disbursal in lump sum or in adequate amount. It also refers is recovery of old loans out

of fresh disbursal

4.   Lack of follow up: It refers to

a.   No information to borrower about repayment schedule.

b.   Not creating an atmosphere conducive for recovery.

c.   Non-reporting of statement accounts to higher authorities.

d.   No written notice remainders.

5.   Organizational Weakness:

It may be because of shortage and untrained staff, unwilling To help in recovery

a.   Might be  because of many  accounts per staff and  frequent transfers

b.   Delay in decision making

c.   Higher officer pays no formal visit to branch

d.   Delay and ambiguity in communication.