Mumbai: Eminent advocates have called for quick reforms in banking sector operations and laws to recover non-performing assets (NPAs) from willful defaulters, and safeguard public sector banks from a potential surge in bad loans and huge write-offs.
Sharing their insights at the Panel Advocates’ Meet, hosted by Union Bank of India on August 8, 2025, here, eminent legal professionals empanelled with the bank, said, despite India’s impressive economic growth of over 6%, post-COVID-19, the credit offtake hasn’t picked up significantly, and the recorded growth in bank credit is not comparable with the size of NPAs and write-offs.
About The Event
Biraja Prasad Das, Chief General Manager–Mumbai Zone, Union Bank of India, presided over the meeting. M Ravindra Babu, Chief General Manager-Stressed Assets Management Vertical, Central Office; and Prasanta Kumar Mishra, Chief Law Officer, Stressed Assets Management Vertical, Central Office, addressed the event.
Advocates interacted with senior executives of the bank, and discussed issues such as legal, operational and social challenges, and the prevailing rules and regulations in the banking sector. Advocates said banks must address all challenges, including timely due diligence before sanctioning loans to potential wilful defaulters. Many opined, often genuine borrowers, including small and medium enterprises take the pain as many banks are reluctant to lend. Ravindra Babu shared his informative views on issues such as depositor's money, strategies of willful defaulters, borrowers’ receivables and book debts, collaterals, legal vetting, intangible assets, etc.
The government and the RBI have been implementing comprehensive frameworks to recover and reduce NPAs. Structural and institutional reforms in IBC, DRTs, and RBI prudential norms for early resolution are being implemented. However, advocates called for more reforms, and regular constructive interactions between PSBs and the government to further revamp the operational procedures, and banking sector laws. Matters relating to the Debt Recovery Tribunal have also come under constructive discussion.
Banking sectors are expanding in emerging market economies as there is a huge shift in bank business models. There are dramatic changes in banks’ asset portfolios, revenue mix and increased reliance on customer-deposit funding. The total business of PSBs rose from Rs 203 lakh crore (FY22–23) to Rs 251 lakh crore (FY24–25). In FY24–25, PSBs posted a net profit of Rs 1.78 lakh crore. On July 22, 2025, official sources revealed that public sector banks have written off loans worth Rs 12.08 lakh crore in NPAs since 2016. Gross NPAs of public sector banks as on March 31, 2025, according to the Ministry of Finance, stood at over Rs 2.83 lakh crore, indicating an NPA ratio of 2.58%. The gross NPAs, however, have reduced from 9.11% to 2.58% from March 2021 to March 2025.
