Optimizing the Realization of Non-Performing Assets in Commercial Banks: Operational and Process Improvement Approaches

Non-performing assets (NPAs) continue to pose significant challenges to commercial banks, impacting profitability, liquidity, and credit flow. While legal enforcement and collateral liquidation are traditional methods of NPA recovery, inefficiencies in operational processes often limit recovery potential. This study explores ways to optimize NPA realization through process improvement, leveraging insights from operations management, financial engineering, and banking technology. Using a mixed-methods approach, the research examines current recovery practices, identifies operational bottlenecks, and evaluates the impact of structured recovery workflows and technology integration on asset realization. Findings indicate that streamlined processes, early-warning monitoring systems, and digitalized recovery platforms significantly enhance recovery rates, reduce recovery time, and improve overall operational efficiency. Implications for bank management, regulatory bodies, and policy development are discussed.

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