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“AAAPL is not a Traditional Debt Recovery /Collection Agency. AAAPL is an end-to-end Strategic Service Provider for Debt Resolution Management via Comprehensive legal support, Productive customer interaction and Stepwise guidance to internal team with Assured Business sustainability & Relationship-building among Lenders & Borrowers both.”

In the past few years, the financial sector has witnessed a significant transformation in India. The financial Institutions like NBFC’s and Banks, are facing an increasingly difficult scenario with increased default incidents and low recoveries compounded by a wave of regulations, thereby directly affecting their bottom-line and increased cost of compliance. These possible frauds or breaches are exposing these organizations to unbounded levels of risk, inflated costs, potential reputational damage and threat of bankruptcy.
Almost the entire industry is struggling for survival and in deep pain burgeoning with bad loans, liquidity challenges, cash crunch, high cost of capital and ever increasing NPAs. Further NPAs are a double-edged razor ceasing income generation, damaging profits, weakening capital structure, increasing borrowing cost, affecting employee morale and depleting funds. Within the last two years, the sector is ailing and in dangerous territory amidst fresh inflows getting dried, honouring repayment commitments becoming difficult, thereby leading to high level of liquidity stress. Further, the Covid-19 pandemic outbreak and following lockdowns have proven to be the be the last nail in the coffin.

Market Size & Our Findings

During our working and interactions with Financial Institutions like Nationalized /Private /Foreign Banks/ NBFCs/ HFCs and other lending institutions, AAAPL realized that almost all of them are facing a tough time due to their huge NPAs and stressed portfolios which on an average range between 1% to 15% and even much more with limited financial backup due to which they are unable to lend further and face other restricted cash flow issues.
We found that the market size of such stressed portfolio is above 5 lacs crores only for NBFCs, and there are approx. 11,000 NBFCs known as Shadow banks registered with RBI with $370 billion share, so they are the hard hit getting very poor results with minimum or no collections. The major reason behind this is the existing work practices followed by these NBFCs. Their major dependency is on lawyers/courts, their on-field collection teams, and honestly, they are still unaware about the root cause of the poor performance.
AAAPL while working across various industry verticals like manufacturing, Retail, services etc., also understood the difficulties or mindsets of borrowers as well and found that most of them are willing to pay back their loans but are unable to do so either due to poor working capital/fund management or lack of planning.
So, the need to focus on stressed portfolios of NBFCs aka shadow banking sector is huge as it is accelerating Consumer economy of the country because:

Significance of NBFCs

  • NBFC sector remained at the forefront in driving new credit disbursals for the country’s underserved retail and MSME market. The NBFCs not only play an important role in steering instant working capital needs but also reduces time for operational finance.
  • NBFCs cater to the diverse financial needs of businesses and individuals, by making customized financial products available to them. It turned to be a game changer in financing the small business enterprises or entities operating in organized and unorganized sectors; and thus, facilitating the Ease of Doing Business.
  • NBFCs also plays a critical role and a key contributor in inclusive development of the economy, financial inclusion of diverse population segments, capital formation and ultimately the growth in GDP. It provides
  • i. stimulus to infrastructure,
  • ii. wealth creation,
  • iii. employment generation, and
  • iv. easy access to financial services to the rural and weaker sections of society.

But once praised for reaching every nook and cranny of India, and despite recording robust growth however, today NBFCs are struggling for survival.

The Real pain of the NBFCs is evident from the above figures which indicate the extent to which their funds are getting blocked in NPAs and accumulating over time, as a result of which some of the NBFCs-
  1.  Have stopped extending further loans (like Religare Finance Group, Reliance Capital Group or Intec Capital); or had to sell their equity stake or raise further debt in order to sustain in the lending business (like Magma Fincorp, Fullerton, Reliance Housing Finance).
  2.  Some other big players in the market are almost taken over or lined-up for closure or sell-out including Reliance Capital and Reliance ARC which are also struggling hard and fighting for sustenance.

Promising sector

Despite the threats being faced by NBFCs; The sector seems promising and surely lucrative which is evident from the fact that even now huge investments have been made by many international fund houses (like Aadhar Poonawaala; SUMO etc.) to revive the jeopardised industry. Seeing their significance in the economy, the realization of NPAs is the pivotal necessity to sustain this financial sector. Thus, NBFCs actually not only need to focus on the remedial measures but also have to improve processes and operational controls for Recoveries and Resolutions to mitigate these risks and keep afloat.

Factors Leading To NPA Crisis/ Default / Non-Payment

Borrower Side

Wilful Defaulters

Unwillingness of the borrowers to service their commitments despite being financially sound.

Helpless Defaulters

Inability of the borrowers to discharge their obligations due to poor working capital management or industry-sickness but still having the intention to pay.


Change in the borrower’s mindset after default on a few EMIs and when the whole loan gets recalled, he is not in the position to discharge. This is when, even if he agrees to pay a certain/proportionate amount, he fears that such disbursement will get charged against extortionate penal interest / levies which he feels will lead him into a vicious circle of debt trap.

Funds borrowed for particular purpose are not utilized for the same.

Lender Side

Poor credit appraisal

Lack of pre-enquiry in ensuring that the business for which a loan is sought is a sound one or not. Leniency in checking whether the borrower is competent enough or whether he is a person of integrity and good character or not.

Improper SWOT analysis

The inappropriate strength, weakness, opportunity and threat analysis is another reason for increase in NPA’s. The profitability, viability, long term acceptability of the project while financing is not examined rigorously.

Unsecured Loans

The NBFC grant advances without any tangible assets as security to safeguard its interests.

Incomplete and faulty documentation

Absence of thorough verification of the documents submitted by the borrowers leads to Complications later.

Real Time Challenges to Non-Realization of NPAS

There are multiple real -time challenges which NBFCs are facing that hinder the resolution of NPAS like:
  • Wilful Defaults;
  • Skipped Customer Tracing Difficulty;
  • Communication Gap;
  • Collection Hassles;
  • Corruption;
  • Erroneous Legal Processes;
  • Non-clarity of Roadmap To Steer the Cases;
  •  Poor Customer Interaction;
  • Borrower’s Business shutdown and many others.

Existing Practices adopted by NBFCs to Resolve NPAs

  • Collection through in-house staff via mails/telephonic calls/visits to customer.
  • Appointment of external recovery/collection agencies.
  • Legal cases filed under Arbitration/ Execution/Lok Adalats which linger on for years.
  • SARFAESI, IBC, civil suits, including criminal proceedings are initiated.
  • Insolvency proceedings are also carried on.

But the hard truth is that current practices are insufficient and not giving desired results.

Herein, AAAPL is one such seasoned professional entity that provides consultancy with efficient risk detection, management and mitigation mechanisms to deal with the crisis.

Avi Adi Advisors Private Limited (AAAPL) is not a Traditional Debt Recovery /Collection Agency, but a Strategic Service Provider specialising in end-to-end Debt Resolution Management via Comprehensive Legal support, Productive Customer Interaction and Stepwise guidance to internal team with Assured Business sustainability & Relationship-building among all stakeholders.

AAAPL collaboratively focuses on the perspective of lenders and borrowers both and offers a comprehensive range of Lender Advisory services supporting lender groups in clearly navigating the challenges faced after loan defaults, legal case complexities and poor debt resolutions.

We also provide financial and operational assessment of borrowers who face difficulties in servicing their commitments, in order to assist lenders in achieving their desired results.

AAAPL successfully handled and decided workable strategy for 800+ low/high ticket cases worth debt of Rs.300 Cr.

We guide NBFCs and lending institutions resolve NPAs with amicable & fastest Debt resolution tools and help improve their cash flows. We execute cordial, ethical yet effective solutions of recovery/collections even from willful default customers either through legal remedies or rigorous improvements in the internal processes and better data management.

We provide analytical and advisory services to recover the bad loans from distressed borrowers empowering them with proper business management, restructuring, rescheduling repayments and guidance to help maximize settlements and case resolutions.

Our Lender Advisory Expertise help institutions lend & borrow better, reviving businesses going bust and support clients reach informed business decisions while ensuring that the interest of both parties is completely protected.

So, in order to work out for

  • a comprehensive plan of action;
  • to guide about the right process to be adopted;
  • the right point to hit so as to convert such default accounts into cash cows and;
  • successful closure of cases by recovering their dues along with interests,

there is a dire need of a Competent advisory firms or Subject Matter Experts that can implement best practices.

Our Strategy

Our strategies align with the enterprise goals and ensures optimal debt resolution that allows for sustained growth and ever-increasing success of the organizations.

Though NPAs cannot be totally avoided, but we help them reduce maintaining focus on building tight information security controls to ensure insulation from further rising threats of NPAs.

We follow the below process:

Different than most “Advisors”, we remain on-site to create a process of regular review and work through implementation as well as refinement of the work being implemented. Aligning business process with a set of very specific actions, plans, and metrics, we train and mentor the client’s staff and put the systems in place to ensure the process is truly impactful, repeatable, sustainable and optimizing.

Detailed Challenges to non-realisation of NPAS / VS. Our Role

Willful /Non-willful Default:

Difficulty in deciding whether the borrower is a Genuine/Bonafide or a malafide defaulter

 Our Role: 

Our Lender Advisory Services begins with a Resolution Approach where others give up since we understand that the willingness to pay up is more common than the tendency to evade loan remittance. We do this through rigorous process improvements and better data management and try to find out the root cause of the default. Our strategies are designed to bifurcate the nature of the defaulter and reduce the time on delinquent accounts and to expedite cash flow.

Communication Gap:

Poor understating between the lender and the borrower regarding their respective concerns due to improper communication.

Our Role:

Though our role ultimately aims at recovery of the NPAs but still we refuse to be called ‘recovery people’ as

  • We do not limit ourselves to just asking for money but our scope of work involves understanding the perspective of the borrower and the lender both, and comprehend their concerns and perspective in the interest of NBFCs.
  • We help in eliminating the communication gap between the two, building relationships and bringing the case to such terms which are acceptable to both the parties
  • We expertise in Meeting clients and tracing the core reasons of defaults and projecting sure shot ways and process improvements to achieve the basic objective of recovering dues payable by them

Collection Hassles:

  1. Collection/Recovery team has different time/different buckets/frequent waste visits/mails/telephonic calls.
  2. Absence of regular follow-up: The irregularities in visits to the customer point decrease the collection of interest and principal on the loan.

Our Role:

We help deploy additional strategies for suitable team shuffling; target case segmentation, on-ground visits, reference checks and stringent follow-ups to optimize the Customer interaction

Skip Customer Tracing Difficulty:

The information generally present with NBFCs is outdated, i.e. Updated information not available with respect to borrowers and their whereabouts.

Our Role:

  • Effective Collection and Accumulation of Customer Information Data that make Customer Interactions Possible which prove out to be strong support for case resolutions& settlement.
  • Maintaining a database containing all the up-to-date information relating to the borrowers, and utilizing such information to the benefit of the lender as and when needed; and suggesting key ideas and tailored strategies to tackle different types of cases and obstacles.


of NBFC collection, sales, recovery, and credit team which may shake hands with the defaulter for their personal interest.

Our Role:

With a shadow on operating efficiencies, including further lending and restricted cash-flows, we focus that outstanding and bad debt be resolved with speed, sensitivity and utmost integrity.


between the collection agency and borrowers where agencies threaten or opt insensitive ways for recoveries.

Our Role:

Overdue collections must adopt a customer-focused, data-driven, relationship-based approach to maximize recovery and minimize write-offs. We have expertise in Providing resolution and amicable debt closure, our success relies on cooperative and intelligent engagement with both lenders and debtors.

Operational inefficiency or weak internal business processes:

  1. Improper assignment of responsibilities among the team members
  2. No consistency and proper feedback on real-time basis with the team
  3. Discrepancy in documents or faulty loan disbursement
  4. Incomplete Documentation like deficiency in loan/ mortgage documents, no mortgage deed signed properly, sanction letter terms not clear etc.

Our Role:
Pre-sanction monitoring is not possible after default but we effectively Scrutinize periodical statements,

  •  We devise strategies after preliminary scrutiny of the financial, commercial, and legal aspects of businesses. We help to identify & dispose of their levied penal interest, various charges, litigations, bad CIBIL records, bad CIBIL records, assets/investments, Financial Cash flow, Budget forecasting & monitoring, etc.
  • With years of expertise in handling extraneous circumstances and situations, we are adept at interpreting results of the MIS, Balance Sheets, and other analytical transactions.
  • We also discuss with the borrower, analyze the borrower’s account with the bank, discuss with co-bankers, chartered accountants, auditors, etc.

Lack of knowledge and clarity to the lender about the next course of action:

Unfamiliarity of the NBFCs regarding the appropriate legal course:
Weak liasioning with lawyers and Ineffective Explanation of the case before lawyers.
Ineffective monitoring and periodic review of the status of the cases.
Mindset of the NBFCs is that their role is over once the cases are assigned to external lawyers.

Our Role:

  • We work hand-in-hand with the legal team advising or suggesting to them the steps required to be taken to make the legal cases more strong/fruitful and less-time consuming.
  • We are adept in exploring the possibility of loopholes of the clients in legal matters which can be used as a strength for the cases to bring prompt results/recovery.
  • We provide quality services in relevance to standards in place, and adherence to governance regulations.
  • We guide the team and provide the best in-line tools and Resolution Plans for sure-shot settlements and Recoveries in both an amicable and legal way through Lok Adalat, DRT, SARFAESI, Civil Suit proceedings, and IBC and guide throughout the due diligence.
  • We are also a seasoned professional in executing Compromise settlements like One Time Settlement (OTS), Out of Court Settlement (OCS), writing off non-recoverable assets.

Erroneous External legal processes:

  1. Reluctance of certain lawyers to go beyond the general practice and not explore legal remedies/ new sections/ideas/ways to handle the case other than those already tried

Our Role:

Introducing the Company with Laws/Provisions/Sections not used earlier which result in yielding satisfactory grades.

Not presenting the case facts and arguments:

before the courts/tribunals well enough in favour of the lenders due to non-availability of supporting information;

Our Role:

Introduction of a wide network of Effective profile lawyers with organized supportive data and information for effective representation of the Case.

Slow judicial process:

amidst Delayed filing of cases, cost inefficiency, Non-compliance of the court orders, absence of information flow from lenders to lawyers due to poor communication, lack of preparation and convincing skills before the next hearing, all resulting in Ineffective representation of the facts before courts/tribunals which inhibits the judgment of the case in their favor.

Our Role:

  • Prompt update and data management about settling of drafts, filing of papers, dates of hearing of cases, copies of judgments, etc.
  • Drafting/ Vetting of replies to the notices, various documents including petitions, replies to miscellaneous applications, affidavits, various MoUs, Agreements /Contracts, etc.

Casually attending court hearings:

In most of the cases, in companies, generally, the only lawyer attends the court hearings; no staff member from the company attends the case, and sometimes even lawyer is absent and sent his junior just to represent/mark his presence who may not have the detailed/any knowledge of the case.

Our Role:

  • Strengthening Overall Legal Structure, Compliances, and due diligence.
  • Executing & Implementation of Court Orders through Police.
  • Representation of several landmark cases before various forums, courts, and tribunals across the country, including Supreme Court of India, High Court(s), National Company Law Tribunal, and its Appellate Debts Recovery Tribunal (DRT), etc.

Criminal cases are filed:
since wilful defaulter has no fear of civil cases but since it is not a criminal offense so court doesn’t give weightage to these.

Our Role:

We present the cases in a better way strongly and genuinely and prove it to be criminal so that the judgment goes in Lender’s favor where the borrower’s intentions are malafide.

Inappropriate Data Management and Feedback:

Due to the absence of proper monitoring/reviewing or management information system(MIS) by lawyers; no proper feedback of court hearings or the orders passed are maintained.

Our Role:

  • Preparing RAM; information collection, organization and utilisation
  • Establishing, implementing, and overviewing standard operating procedures

Order interpretation mismatch:

The order dictated by the judge is not being notified/updated to the complainant except for few states, so at other places, the meaning of the order /compliance might get change as per the interpretation of staff /lawyer attending the hearing.

Our Role:

  • We help in real-time management and updation of court status where we compare the MIS send by the lawyers (If) or prepare it which might differ so we strategize next hearing accordingly.
  • We ensure that the lawyer has studied in detail all the laws/sections to be used including Assets of borrowers.

Industrial Sickness(Borrower’s):

No income/ Business of the borrower gets closed; hence, he is unable to repay the loan or obligations.

Our Role:

  • We offer the right amount of counseling about the negative impact of non-payment and in some genuine cases offering a restructuring of loans, fund-raising options, bill discounting, channel financing & help lenders and borrowers improve their collection/payment rates.
  • We advise clients the best possible source of fund-raising options to improve cash flows. We help regularize or close the loans either by repayment, taking cheaper facilities from bankers, or introducing different banking products like bill discounting and channel financing to borrowers and sometimes introducing investors if required. This not only helps them regularize their repayment obligations towards the lending Institution but also improves their businesses as well.


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