Types of NPA

NPA have been divided or classified into following four types

Standard Assets: A standard asset is a performing asset. Standard assets generate
continuous income and repayments as and when they fall due. Such assets carry a normal
risk and are not NPA in the real sense. So, no special provisions are required for Standard
Assets.
Sub-Standard Assets: All those assets (loans and advances) which are considered as
non-performing for a period of 12 months are called as Sub-Standard assets.
Doubtful Assets: All those assets which are considered as non-performing for period of
more than 12 months are called as Doubtful Assets.
Loss Assets: All those assets which cannot be recovered are called as Loss Assets.

Causes of NPA
Speculation: Investing in high risk assets to earn high income.
Default: Willful default by the borrowers.
Fraudulent practices: Fraudulent Practices like advancing loans to ineligible persons,
advances without security or references, etc.
Diversion of funds: Most of the funds are diverted for unnecessary expansion and
diversion of business.
Internal reasons: Many internal reasons like inefficient management, inappropriate
technology, labour problems, marketing failure, etc. resulting in poor performance of the
companies.
External reasons: External reasons like a recession in the economy, infrastructural
problems, price rise, delay in release of sanctioned limits by banks, delays in settlements
of payments by government, natural calamities, etc.

Research Methodology:
Statement of the Problem:

Non-performing assets are those which are not been yielding revenue for a long period of
time. The bank will always face the problem of NPA because of poor recovery of advances
granted by the bank and several other reasons like adopting a poor recovery strategies so when
the loan is not recovered from the bank effectively and efficiently that balance amount will
become the NPA to the bank it may create some huge problem to the banks financial status. In
order to evaluate the performance of the Pollachi Co-operative Urban Bank Ltd. It feels
necessary to undertake the study regarding management of NPAs.

Data Collection:
The present study is analytical is nature and others relevant particulars are collected from
primary data source. I have contacted manager and discussed details about NPA and functions of
the bank. The secondary data are collected from annual reports of the bank.

Objectives of the Study

To study the management of NPA of co-operative bank. Special emphasis on Pollachi
Cooperative Urban Bank Ltd
To study about assets classification.
To find reason for loan amount to become NPA.
To study the strategic and steps to reduces NPA.