Lok Adalats have proved to be an effective institution for settlement of similar dues. The Union Budget for 2002-03 announced the setting up of a pilot Asset Reconstruction Company with the participation of banks, financial institutions and multilateral agencies. The new Credit Information Bureau will provide an institutional mechanism for sharing of information on borrowers.
A recent landmark development which should have a long term favourable impact in reducing the level of NPAs is the passage of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.