pay up on the 89th day to avoid the NPA tag.
With JLFs in action, customers have started paying up on the 59th day, a banker said. “If the JLF formation is now made mandatory after the 30th day, then the borrowers are forced to repay even earlier. This may cause a lot of financial stress for them, which may result in loan defaults later,” the banker said.
The SMA norms make it very difficult for banks to delay decision-making since they would need to make accelerated provisions for such accounts.