Manish Gadia Posted almost 3 years ago Non Performing Assets (NPA) Recovery Grid Strategies for recoveries for a “DEAD” customer: - At any point if there arises an opportunity to move the defaulter to any of the other quadrants, the chance should be grabbed with most sincere efforts from the collection team. Offering waivers to customer on outstanding loan amount (subject to rules, case to case basis) can be one of the ways in which lending institution may try to make customer co-operative. - Legal proceedings, collections by agents (external & Internal) would be at highest level here. Lending institution on due course may be able to recover some amount on liquidation of assets if the loan is against a security. - In cases where these efforts don’t materialize, the customer should be approached for a one-time settlement (OTS). In these settlements, a higher waiver ranging from 20-50 percent can be given (based on parameters / rationale existing case to case). However, in many cases, the customers don’t respond to any communication and try to escape any kind of payments. In the end, when OTS doesn’t work out, the exit strategy should be to sell these assets selectively to an Asset Reconstruction Company (ARC). These companies buy a portfolio of assets at a certain percent of the value of portfolio. They are specialized in reworking the assets to make out maximum from the bad debts (Simon Mundy, 2010).