Studying the Various Strategies for Restructuring the Non Performing Loans in Free Usury Banking System

One of the basic problems of banking system in current conjecture, is increasing the amount of non performing loans compared with total extended facilities of banks. Some customers of banks, despite their willingness to pay their debts, do not have the sufficient payment power at the appointed maturity, but, if in case, there is any banking cooperation for restructuring of debts, they may continue the activities of their firms and will settle their debts in a gradual manner, within the specified time. However, with respect to importance of restructuring issue, the banking system has designed and implemented different strategies, which although, they are helpful to perpetuate the activities of the firms, but, they are subject to serious critics from the Jurisprudential, legal, economic and banking points of view in toto. Hence, in this applied survey, an attempt is made to criticize the current methods of restructuring of debts, viz-a-viz utilization of Analytic- Descriptive Approach thereto, and propound a new strategy for execution of restructuring process of non performing loans of banking system. The basic function of this strategy, is to use the diminishing partnership contract, under which the customer in this form of contract, will participate with banks for its owned portion of capital assets, and with condition of being authorized to use the partnership share of banks, he is obliged to pay the renting cost of asset and gradually purchase the partnership share of banks, ipso facto. This type of financing method can be implemented along with other existing contracts, or otherwise as an alternative in the banking system, quid pro qua.