Saving an NPA the Wrong Way: Unethical Practices in Loan Slippage Prevention

In this episode, we uncover a real-life banking case where loan accounts were prevented from slipping into NPA through unfair and unethical practices rather than legitimate recovery efforts.

To avoid NPA classification, a branch manager used personal funds to clear borrower overdues, later attempting recovery by debiting borrower loan accounts and routing funds through an internal Recreation Club account. What appeared to be short-term damage control ultimately turned into a serious violation of banking ethics, conduct regulations, and recovery norms.

🎧 What this episode covers:

• How and why loan accounts slip into NPA

• The dangers of artificially preventing slippage

• Why using personal or internal accounts is strictly prohibited

• Ethical and regulatory consequences of such actions

• Importance of mandatory reports and early recovery follow-up

• Clear dos and don’ts for branch managers and officers

This episode is essential for branch heads, credit & recovery officers, operations staff, internal auditors, and banking aspirants, reinforcing a powerful message: targets can never justify unethical actions.

⚠️ If something is not right, not fair, or not just — it must be reported.