Welcome to Our NPA Restructuring Services
In today’s dynamic economic environment, businesses often encounter the challenge of non-performing assets (NPAs). These NPAs can significantly impact an organisation’s financial health and hinder its growth potential. At Fund Source, we understand the complexities and consequences associated with NPAs. We offer comprehensive NPA restructuring services to help our clients overcome these hurdles and transform their non-performing assets into viable investments. Click Here to fund your NPA Account What is NPA Restructuring? NPA restructuring refers to modifying the terms and conditions of loans or debts extended to borrowers facing financial distress. This restructuring aims to revive the borrower’s financial position, improve repayment capabilities, and prevent the loan from being classified as a non-performing asset. Through strategic interventions and negotiations, NPA restructuring can help both lenders and borrowers find mutually beneficial solutions that enable loan recovery and support business revival. Our NPA Restructuring Services At Fund Source, we specialise in providing comprehensive NPA restructuring services tailored to meet our client’s unique needs and challenges. Our team of experienced professionals possesses in-depth knowledge of banking, finance, legal frameworks, and industry best practices. We work closely with lenders and borrowers to develop customised solutions that facilitate the revival of businesses and maximise the recovery of outstanding loans. Our services include: Why Choose Fund Source for NPA Restructuring? Contact Us Today If you are facing the challenges of non-performing assets and need expert assistance in restructuring your loans, Fund Source India is here to help. Our dedicated team of professionals is ready to guide you. Click Here to fund your NPA Account
How we helped Hyderabad Based client for the OTS Finance
This is about one of a our clients located in Hyderabad. We arranged the finance for his one time settlement with state bank of Hyderabad. For doing OTS Finance we are associated with some lending companies who are specially interested in financing such OTS transactions. Client was having business of spinning mills. The spinning mill was started in year 2003. After some initial years, mill developed business in fast pace and started exporting in 10+ countries. Their company turnover increased manifolds & attains a turnover of Rs. 200+ in year 2011. They are enjoying a credit facility from state bank of Hyderabad to the tune of Rs.62 crores. Their repayment to bank was running very well till year 2013. Click Here to finance for your One Time Settlement Due to all above factors, their turnover dipped very steeply and they are unable to repay installments & interest so their accounts in state bank of Hyderabad, slips in to the NPA. They requested and corresponds with bank mentioning above factors and why they are unable to serve interest on time. But, bank due to their strict policies unable to help them on this and issued notices under sarfaesi act 13(2) & 13(4) and demanded Rs.78 crores including interest & penalty. Wherein actual principal was Rs.58 crores only. Matter was aggravated and client approached the DRT court for stay & court on various backgrounds puts a stay on taking possession & auction of collaterals. Upon realizing that case is slipping from their hands, bank moves to NCLT court. After litigation & disputes, in year 2019 bank agrees for one time settlement with promise of waiving of all interest & penalties levied on the account. So they ask the client for formally apply for a OTS. So, client applied for OTS of Rs.50 crores but bank denies and asks to raise some more. So client once again applied for Rs.55 crores. Now, his application for one time settlement was accepted by bank and client got OTS letter of Rs.55 cr from bank with a timeline of six months. Now, the next struggle starts for arranging money for paying off OTS. Client already planned for liquidation of his few properties which was free from any bank mortgage & buyer was already finalized but only waiting for green signal from bank. So, client was having a arrangement of around Rs.30 crores that was infused by client. Now, there was shortfall of rs.25 crores. For which client starts searching in his local market of Hyderabad. But, he could not found a proper solution. But, one a consultant(suresh reddy) whom was contacted by client start looking on google and after one or two trials he approached us. He explained the complete case and shared the documents whatever available with him. He also made us contact the client directly and through video calls, we collected some more information & documents required in the proposal. Luckily client has another company in which same business of spinning mill was running but business turnover was very less because main turnover was in their flagship company which slips in to npa. After declaring their account NPA, bank freezes their accounts which makes them unable to run business. So they diverted some of the business in that company and his sales raised rs.114 crores. Also this company has light debt of rs.3.5 cr CC limit form KVB. Now, we planned for taking both of the company in this new loan of OTS finance. One was the NPA company and one company serves as financial pillar for this new loan. Loan will be raised through help of this new company as it is having good supportive balance sheet with positive cash flow. Financial liability will be served by this new company & properties(land, building & machinery) of previous npa company is taken as collateral for this loan. So, we started the process for this OTS finance, first we gather all the documents of both companies and officially login the case in one of our lending company specialized for such kind of OTS finance transactions. They deeply studied the case & met the client also does the due diligence of business. Also does the legal & valuations of all underlying securities/collaterals. After getting a positive response from their credit committee they issued a term sheet to client describing all terms & conditions for new loan. And after few negotiations between the parties, letter was accepted by client. And final due diligence was done with state bank of Hyderabad regarding previous loan papers personal guarantees, underlying securities & other terms & conditions. Once all due diligence completed they informed the previous bank about release of payment from their end and execute legal document for taking over previous loan & securities from bank. Also legal agreements & documentation is done with client. And after successfully completing all the documentation they disburse the amount directly to previous bank & all the collateral handed to new lender in proper timely manner.
NPA Finance: Common Challenges Faced by Borrowers and Lenders
However, here are some general issues related to Non-Performing Assets (NPA) finance or funding:
What is loan Against Property ?
A Loan Against Property (LAP) is a secured loan where a borrower offers their property as collateral to obtain funds from banks or financial institutions. It is one of the most popular credit facilities provided by banks to individuals and businesses seeking small to large amounts of money for personal or business purposes. This is a convenient financial solution that allows borrowers to leverage the value of their property without selling it. Its flexibility in usage and longer repayment tenure make it an attractive option for fulfilling personal and business needs. Let me know if you’d like any further refinements! A loan against property can be raised against the following types of collateral: Whereas, for giving a loan against property/collaterals, banks also require an established business and income to secure timely repayments. The bank will evaluate your eligibility based on various parameters such as the value of the property, financial repayment capacity, credit score, etc. Once the evaluation is complete, the lender will disburse the loan amount within a few days, and the property will be mortgaged througha simple mortgage or a registered mortgage as per their policy. Click Here to Get a Loan Against Your Property Loan against Property Interest Rate The interest rate on a loan against property depends on the lender, the loan amount, and the type of collateral offered by the borrower. It is usually lower than other forms of credit, such as personal loans or credit cards, as it is a secured loan. Generally, banks offer the lowest interest rates comparable to others, 8.5% to 9.5% NBFCs offer slightly higher interest rates, starting from 9% to 16% Loan Against Property Eligibility Documents Required for LAP Loan The following documents are generally required for availing a loan against property: Features & Benefits of LAP Loan:
How Does a One-Time Settlement Process Function?
A one-time loan settlement (OTS) is a process where a borrower and a lender agree to settle a loan for a lump sum payment, which is typically less than the full amount owed. Here is an overview of how a one-time settlement typically works: It is important to note that the terms of an OTS agreement can vary based on the specific circumstances of each case, and the settlement may have an impact on a person’s credit score and financial situation. Additionally, there may be tax implications associated with a one-time loan settlement, depending on the type of loan and the settlement amount. Does One-time settlement affect cibil score? Yes, a one-time settlement negatively impacts your CIBIL score. When you settle your loan, the bank marks it as “settled” in the report instead of “closed.” This indicates that you were unable to fully repay the loan, which is seen as a sign of financial distress. As a result, your CIBIL score remains negatively affected for up to 7 years.
Will bank employees get five-day work week?
Despite the consent of the Indian Banks’ Association (IBA) at the meeting with the United Forum of Bank Unions (UFBU), there is no clarity yet on a five-day work week for banking employees, according to people familiar with the development. Click Here to fund your NPA Account “Things are still tentative and informal. IBA will consult with the government and then tell us. I would say no concrete development so far,” said one of the people quoted above on condition of anonymity. No circular yet At the meeting on February 28, 2023, there was a discussion on having uniform office hours from 9.50 am to 5.30 pm on all working days, cash hours from 10 am to 4 pm and customer services till 4.30 pm. It was agreed at that time that the introduction of a five-day banking week would be considered, the forum said. However, none of the participating organisations has made any written circular on the five-day work week proposal said another person. “Generally we get minutes of the meeting but we have not gotten so far. We are still confused whether the pact has been signed between UFBU and IBA or not,” said the person. Long-pending demand Five-day work week is a long-pending demand of Indian bank employees, who started working on alternate Saturdays around eight years ago. Bank unions have been demanding since 2015 that they be given time off on all Saturdays and Sundays. In the 10th Bipartite Settlement signed in 2015, the IBA agreed after approval by the RBI and the government that second and fourth Saturdays would be holidays, according to the United Forum of Bank Unions, an umbrella body of nine national-level bank unions. The issue was taken up during the 11th Bipartite Settlement talks but could not be resolved. IBA and Bank unions negotiate salaries once every five years under the bipartite agreement. Other organisations Bank unions stepped up their demand for five-day work week after several other organisations followed the model. For instance, employees of Life Insurance Corporation of India switched to a five-day work week on May 10, 2021. Recently, the National Stock Exchange extended trading hours for interest rate derivatives till 5 pm, according to an official circular. The change in timing will come into effect from February 23. Click Here to fund your NPA Account The trading window is now six hours and 30 minutes, stretching from 9 am to 3:30 pm. The decision to extend the time till 5 pm is intended to converge the trading hours with the underlying market timings, the exchange said. Source: Will bank employees get five-day work week?
One-Time Loan Settlement: Pros And Cons
One-Time Loan Settlement (OTS) is a process in which a borrower and a lender agree to settle a loan for a lump sum payment, typically less than the full amount owed. This type of settlement can be used to resolve a loan that is in default or past due, or to simplify the loan repayment process. Click Here to finance for your One Time Settlement In a one-time loan settlement, the borrower agrees to pay a lump sum payment to the lender in exchange for the forgiveness of the remaining debt. This can result in a lower overall debt burden and lower monthly payments for the borrower. However, it can also be expensive, as the borrower may have to pay a large portion of the debt upfront. The success of a one-time loan settlement depends on the agreement between the borrower and the lender, and it is important for both parties to understand the terms of the settlement. It is advisable to seek the advice of a financial or legal professional before entering into a one-time loan settlement agreement. Pros of One-Time Loan Settlement: Cons of One-Time Loan Settlement: Click Here to finance for your One Time Settlement
Facts and circumstances of Supreme Court’s judgments about OTS
The Supreme Court of India has made several judgments regarding the one-time settlement (OTS) of loans, and the specific facts and circumstances of each case have influenced the outcome of the judgment. Click Here to finance for your One Time Settlement In some cases, the Supreme Court has upheld the rights of banks and financial institutions to recover their loans through legal means, including the OTS finance. The court has emphasized the importance of proper documentation and transparency in the loan settlement process. In other cases, the Supreme Court has ruled in favor of borrowers, emphasizing the need for fair and reasonable loan settlement terms. The court has also considered the overall financial situation of the borrower and the potential impact of loan settlements on their ability to repay other debts. It is important to note that the Supreme Court’s judgments in this matter can vary based on the specific facts and circumstances of each case, and it is advisable to consult with a legal expert for a more accurate understanding of the impact of these judgments on a particular loan settlement situation. What was held by the court in these OTS judgments? The Supreme Court of India has made several judgments regarding one-time settlement (OTS) of loans, and the specific holdings of each judgment have varied based on the facts and circumstances of each case. In general, the Supreme Court has held that: It is important to note that these holdings are not applicable in every case and may vary depending on the specific facts and circumstances of each case. Therefore, it is advisable to consult with a legal expert for a more accurate understanding of the impact of the Supreme Court’s judgments on a particular OTS situation. Click Here to finance for your One Time Settlement
OTS (Case Study)
Life is full of challenges; one of them is NPA situation. This comes when someone defaults in bank or nbfc loan. This is very critical as it kills few years from progress of professional life and financial progress. It also kills the huge amount of money in terms of heavy interest & charges levied by bank/nbfc. Also, takes away your sleep, due to legal actions taken by bank through DRT & NCLT proceedings or through their sale process of collateral. Click Here to finance for your One Time Settlement So how to get out of this Situation or Status. One of the best ways is to approach the bank for OTS or One Time Settlement of your Loan. Here is one case study: One of our clients was NPA from some nationalize bank with outstanding of Rs.22.58 cr. Clients asks for finance arrangement of Rs.17.00 cr as they have arrangement of Rs.5 cr with them. We studied the whole case found that: out of total outstanding of Rs.22.58 cr, principal amount was Rs.17.02 cr and collateral valuation was somewhere around Rs.40 cr. As per our industry rule, we can only fund up to 50% of market valuation of collateral and we know from our experience the final distress valuation must be come around Rs.34-35 cr. We suggested client to apply for a One Time Settlement (OTS) in bank. We suggested applying for OTS of Rs.17 cr and also giving a 10% cheque as token amount of OTS. As per suggestion, client applied for OTS of Rs.17 cr and also simultaneously applied a proposal for funding with us. But bank gave an OTS of Rs.17.58 cr & given time of three months. Client accepted the OTS and now, trying for funding with us for amount of Rs.12 cr as Rs.5cr was already with client. After ups & down of loan process, we finally managed to get loan sanction for Rs.12 cr. We paid Rs.12 cr directly to bank & Rs.5.5 cr was deposited by client. In this way, total OTS amount was given to bank and all the securities come to us. Let’s see how client benefited out of this OTS & funding: • Client saves Rs.5 cr by going through One Time Settlement (OTS)• Client not only saves Rs.5 cr, but also saves interest on 5 cr( if takes a loan of Rs.17cr)• Client gets moratorium period for six months• Client gets a total tenor of Five years for repayment• NPA status will be wiped from day one• New track record of loan started with us• Client gets immediate relief from DRT proceeding• Not only, successfully saves his valuable assets of factory but also nest of family, his House property Click Here to finance for your One Time Settlement
NPA One Time Settlement with the Bank NBFC
How to Came out of NPA Status Permanently Click Here to fund your NPA Account NPA account is like a nightmare, but it is sure that one can pass this night also. Best way to pass this nightmare, to get a loan or finance or Takeover of NPA account in some other lenders company. But, people feel financing their NPA as the most hard thing as they never dealt this kind of situation before and they are also new to Loan process for NPA account. But, we will let you know, how you can came out of this NPA Status Permanently. Kindly focus on the following point : OTS or One Time Settlement with the bank/NBFC is the beneficial for borrowerOTS can be applied directly, without any external helpOTS Financing or Outstanding NPA Finance is a possibilityNPA account finance works in a way like: Transfer of NPA Account in new lenders CompanyTakeover of NPA Account can be done in a registered company & under RBI ComplianceYou require a financial consultant to help you in this financing, because he knows about this market and have ready contacts for this.Choose a Financial Consultant who is well versed & knowledgeable on the subjectGive him complete clarity of your case & provide all documents & information requiredMost important ; Take this funding as Bridge FundingTaking this financing, borrower get rid of the NPA Status instantly, but cibil score is still an issueBut, Track record or repayment of this new loan will improve your cibil also. Usually, cibil updates on every quarter. So it will take around a year to improve cibil score.Good repayment with this new lender is also very helpfulSecond Round of Finance : Now, after a year try for second round of funding in some regular NBFC or BankImproved Cibil score is very helpful in this second round of financing, while good repayment schedule will give confidence to this lender or NBFC/Bank in giving approval.In this second round, you can also get working capital at some good rates and different financial products needed in businessNow at this stage, you are permanently free of all NPA issues. Click Here to fund your NPA Account
