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CAUSES AND EFFECTS OF

NON-PERFORMING LOANS
IN BANKS
DAS,AMIT
14-98030-3

Findings (Causes of NPL)

Improper preparation of credit risk


grading score sheet (57.19%).
High cost of borrowing (8.63%).
Biasness while providing loan (18.75%).
Over competition among banking sector
(47).

Findings (Effects of NPL)

Standard non-performing loan rate is 4%.


Lowers ROA.
Economic slowdown.
Lower dividend payout and retained
earning.
Financial distress.

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