With a sharp increase in the banks' non-performing assets, more and more properties and assets mortgaged to the lenders are going under the auction while the number of possession notices published in the media has also gone up significantly,  reflecting a tremendous stress in the economy, an  Assocham paper has noted.

''Visibly, the sale and possession notices appear more for the small sized assets mortgaged for the loans which have gone bad. Also the stress seems more in the small sized manufacturing units for which banks have been slapping the sale and possession notices,'' the Assocham paper said.

However, the auction notices have not been receiving a big response, largely for the reasons of slowdown and the corporate sector being under high leverage.

It said while some banks had started publishing photographs of the borrowers and guarantors for the failed loans, others have restrained this temptation.

''We will urge the banks to avoid publishing pictures of the borrowers since it does no good either to the banks or to the failed borrowers, a large number of whom would have failed to repay the loans for reasons beyond their control,'' the Assocham secretary general, D S Rawat said.

The possession and the sale notices are issued by banks and other lenders like financial institutions under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (known more as SARFAESI Act).  These notices are for the immovable properties mortgaged with the banks.

While the assets portfolio of the public sector banks is much larger than those of the private sector banks, the number of the sale/possession notices is more by the state-owned banks, disproportionate to their assets under stress than the private sector lenders.

According to an earlier Assocham paper, the NPAs in banks could see further deterioration as the gross amount may touch 5% by the end of March 2014, As of September 2013, banks together approved Corporate Debt Restructuring (CDR) worth Rs 2.72 lakh crore out of Rs 3.62 lakh crore that came for restructuring.

Iron and steel and infrastructure sectors are the largest contributor to NPAs of the public sector banks. Besides, aviation, textiles and mining are also adding to the stressed assets.

These five sectors together contribute around 24% of total advances of all banks, and account for around 51% of their total stressed advances at the end of September, 2013.

''While the RBI has been making serious efforts to deal with the issue of stressed assets and its latest discussion paper encourages bank financing for takeover of the troubled businesses, the rules should be made easy enough so that the issue can be tackled in a more pragmatic manner.''

''After all, there are several cases where the businesses changing ownership have been revived for various reasons including better synergies and change of business models and other rationalising steps. All efforts need to be made to somehow revive the businesses which have either sunk or are on the brink of closure,'' the Assocham secretary general said.

According to the paper, the worst seems to be over and the situation may improve in the fiscal 2014-15, though the improvement may not be dramatic as long as the consumer confidence is restored and the investment cycle gets back on track.

For the present, it is a difficult going both for the banks and the borrowers and those who survive the troubled times will be among the winners in the medium term, the Assocham paper pointed out.