The Definition of “Non Performing Assets” defined by RBI in its Master Circular No.DBOD.No.BP.BC.17/21.04.048/2009 dated. July 1, 2009 followed by all the Banks is meant for implementing stringent financial discipline by the borrowers in conducting their loan account / portfolio and for implementing international prudential norms.
This definition if adopted as per clause 2(o) of the SARFAESI Act,2002 to enforce the security interest under Chapter III of the Act; for purpose of initiating action against the borrowers, more so against the Guarantor who has offered his property as collateral security; will lead to injustice.
The definition of NPA in the RBI master circular is very harsh & unjust. It is challenged in the High Court of Karnataka
