RECOVERY ASPECTS OF BANK ADVANCES IN INDIA:A LEGAL ANALYSIS

Banking is a business which trades in money. The prime objectives of Banks are to receive deposits and use those deposits efficiently so as to make money. In the present era, almost every person and most of the companies approaches the Banks for the loan and advances. The purpose of taking loan and advances differs from individual to individual and from institutions to institutions. Some needs it for personal purpose; some may take for business purpose and many other reasons. The Bank and Financial Institutions (FIs) are an establishment which makes such advances to the Individual and company whenever they require. Also, the major portion of the Bank Funds is employed by way of loans and advances, which provides profit to the banks and the most profitable sector for banks. Banks grant such advances mainly through the Secured Loans, Term Loans, Unsecured Loans, Working Capital Finance, Cash Credit, Overdraft and discounting of commercial bills as per the needs of Customer and for different purposes by considering the lending norms of the Reserve Bank of India (RBI) and certain restrictions given under section (u/s) 20,20A, 21, 21-A of the Banking Regulations Act, 1949. Even, though banks can lend money without the security but generally, banks demand for security for the repayment of advances and such Securities are in the form of fixed assets, receivables etc. accepted by the banks for sanctioning the loans. As per the reports, the Scheduled Commercial Banks (SCBs) has lent Rs. 70554.77 crores against the total deposits of the Rs.92182.73 crores as on January, 2016