IMPACT OF COVID-19 ON NPA RECOVERY IN NATIONALIZED BANKS: AN EMPIRICAL STUDY OF THE SARFAESI ACT, 2002

The present paper studies the impact of Covid-19 pandemic on recovery of non-performing assets(NPAs) of Indian banks. There are different laws in India pertaining to recovery of non-performing assets of the banks such as the Securitization and Reconstruction of Financial Assets and Recovery of Security Interests Act, 2002 also known as the SARFAESI Act, 2002. This statute is one of the key tools for recovery of non-performing assets of the banks in India especially the governmental banks which are saddled with excessive non-recoverable debt. This research paper has examined specifically the extent to which policy makers can use the SARFAESI Act, 2002 in facilitating the recovery of NPAs in the context of the pandemic. The study seeks to establish the conditions faced by banks, the role played by regulatory actions such as moratorium, and any suitable modifications on operations the banks carried out under SARFAESI Act for the constraint due to the COVID-19 pandemic. This research paper utilizes a mixed-impersonal research design methodology for understanding the impact of covid-19 pandemic on the recovery of non-performing assets.The methods used in the study include a trend analysis of the existing Non-performing assets, review of existing laws and policies and interviews with key stakeholders for an assessment of the reality operations thereby shedding light on the overall recovery performance of these non-performing assets while combating the pandemic. Overall, through the analysis of the recovery trends, this paper tries to deal with the possible flaws of the statute and provide legal measures for the policy improvement of the same.