Role Of “Insolvency And Bankruptcy Code 2016” In Managing NPA

In the process of extending credit, the unwanted by products generated are considered as NPA (Umar and Sun, 2018). The banks consider a loan or advance, an NPA if its interest or principal amount remains due for more than 90 days. NPA is continuously increasing since 2011, post financial crisis and reached at an alarming stage in 2015, after implementation of AQR Mechanism by RBI. Banks have adopted a lot of strategies to handle NPA, but lack of strong bankruptcy code always remained a hurdle in the way of banks. So, in 2016, Insolvency and Bankruptcy Code came into practice to solve the issues concerning the insolvency and bankruptcy in India.