The management of NPAs has been fortified by the enactment of the Securitisation & Reconstruction of Financial Assets and Enforcement of Securities Interest (SARFAESI) Act, 2002 which provides statutory support for the enforcement of creditors’ rights and inter alia, paved the way for the establishment of Asset Reconstruction Companies.
Fourthly, Debt Recovery Tribunals were set up to assist the banks in the recovery of loans. Fifthly, the Scheme of Ombudsman was introduced in 1995, to look into and resolve customer grievances. Sixthly, the State Bank of India Act, 1955 and the Bank Nationalisation Act of 1970 were amended to enable the banks to access the capital market for debt and equity.