NPA Resolution & Settlements · Question

How do I prepare a realistic repayment proposal for an NPA account?

Short answer

A realistic proposal shows why the account became stressed, what the business can genuinely pay from its cash flows and assets, and a schedule you can keep without new problems. It should be backed by figures and documents, be specific on amounts and timing, and be written so a credit committee can understand it without a long explanation.

In more detail

Lenders see many proposals. The ones that gain attention are usually those that look achievable, not generous. A promise that collapses in a few months is worse for everyone than a modest plan that holds.

Start from capacity, not from the hoped-for outcome. Work out your realistic monthly cash generation after essential costs, then see what portion can go toward dues without starving operations. Add any one-time sources you can honestly count on, such as sale of a non-core asset, release of idle stock or promoter funds, and be clear about timing and certainty.

A solid proposal usually covers these elements:

A short background: cause of stress, steps already taken, and why the business remains viable.
A current position summary with receivables, inventory, order book and commitments.
A cash flow projection for the repayment period with stated assumptions.
The offer itself: lump sum, instalments or a mix, with dates and sources of funds.
What you ask of the lender, such as a pause on further charges or a period to arrange funds.
Any additional comfort you can offer, such as security or promoter support, if appropriate.

Do not stretch the numbers

An optimistic projection that you cannot meet damages credibility. If the lender questions assumptions, plain reasons beat defensive ones. Prepare a conservative case and keep a second, stronger scenario only as a note.

Present it in a short, organised document with annexures for evidence, and send it with a covering email requesting a meeting. Expect questions and possibly a counter-proposal. Whether to accept a proposal is the lender's decision, made inside its own approval structure, and no proposal can promise an outcome. Taking advice from a qualified professional on terms before you sign anything is sensible.

Key points

Base the offer on realistic cash capacity, not on the outcome you hope for.
Explain the cause of stress and why the business remains viable.
Support every figure with documents and state assumptions plainly.
Offer a specific schedule with dates, amounts and sources of funds.
Keep the base case conservative; the lender decides, and no outcome is assured.

Who this applies to

Borrowers with an NPA account who intend to propose a settlement or schedule.
Finance heads building the projection and supporting annexures.
Promoters considering what comfort they can offer alongside the proposal.

Last reviewed 3 October 2026

This answer is general information, not advice on your particular case. Terms, eligibility, and requirements change, so check the current position with the relevant institution or authority. Lalsar Holdings' financial advisory and financing work is advisory and facilitation only. Lalsar Holdings is not a lender. Sanction and disbursement of any credit facility is at the sole discretion of the partner bank, NBFC, or financial institution involved, subject to their own eligibility criteria and credit policy.