Академический Документы
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Research Design
The
research design that will be used is Descriptive Research. Involves gathering data that describe events and then organizes, tabulates, depicts, and describes the data. Use of visual aids such as graphs and charts to aid the reader
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DEFINITION OF NPAS
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Categories of NPAs
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Provisioning Norms
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The RBI has summarized the factors contributing to higher level of NPAs
Diversion of funds, which is for expansion, diversification, modernization, undertaking new projects and for helping associate concerns. This is also coupled with recessionary trends and failures to tap funds in capital and debt markets. Business failures (such as product, marketing etc.), which are due to inefficient management system, strained labour relations, inappropriate technology/ technical problems, product obsolescence etc. Recession, which is due to input/ power shortage, price variation, accidents, natural calamities etc. The externalization problems in other countries also lead to growth of NPAs in Indian banking sector. Time/ cost overrun during project implementation stage. Governmental policies such as changes in excise duties, pollution control orders etc. Willful defaults, which are because of siphoning-off funds, fraud/ misappropriation, promoters/ directors disputes etc. Deficiency on the part of banks, viz, delays in release of limits and payments/subsidies by the Government of India.
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EARLY SYMPTOMS
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DATA ANALYSIS
NET
10
0 years
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COMPARISON OF NET NPA OF OLD AND NEW PRIVATE SECTOR BANKS: 2000-01 to 2009-10
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2020
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Year 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 20010-11
Public Private Foreig S n chedu Public Private Foreig S n chedu S ector S ector banks led S ector S ector banks led banks banks Comme banks banks Comme rcial rcial Banks Banks
12.37 11.09 9.36 7.79 5.53 3.64 2.66 2.23 1.97 2.19 2.23 8.37 9.64 8.07 5.84 3.77 2.45 2.17 2.47 2.89 2.74 2.25 6.84 5.38 5.25 4.62 2.85 1.95 1.77 1.75 3.8 4.26 2.54 11.4 10.4 9.1 7.2 5.2 3.29 2.51 2.25 2.25 2.39 2.25 6.74 5.82 4.53 2.98 2.06 1.32 1.05 0.99 0.94 1.09 1.09 5.44 5.73 4.95 2.84 1.85 1.01 0.96 1.09 1.29 1.01 0.56 1.82 1.89 1.76 1.49 0.86 0.83 0.97 1.21 1.81 1.82 0.67 6.2 5.5 4.5 2.9 2 1.22 1.01 1 1.05 1.11 0.97
4.61 2.84
3.73 1.7
5.29 3.59
2.6 2.13
2.43 1.98
1.38 0.47
2.5 1.98
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Year
DRTs Involved
SARFAESI ACT Recovery Amount Involved 4735 3463 3020 3348 3133 3540 8517 9058 7263 12067 14249 10231 3363 3749 4429 3982 4269 3958
Total Recovery % Involved 16934 18972 15224 20220 31281 20526 8363 7318 7625 7426 7514 7649 49.38 38.57 50.08 36.72 24.02 37.26
Recovery Amount
Recovery Amount
2005-06 2144 2006-07 758 2007-08 2142 2008-09 4023 2009-10 7235 Average 3260
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8 .7
0 5 .0
0 6 .4
0 5 .9
1 4 .1
0 1 .5
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MAJOR FINDINGS
The
fund blocked in as Gross NPA is huge i.e. amt 59926 crore during the year 2009-10. But there is no time frame and follow up to recover the blocked amount. The NPA level during the study period is quite alarming but it is positive sign to note that the percentage of NPAs is reducing i.e. it was 3.6 in 2005-06 and came down to 2.19 in 2009-10. The non performing assets came down considerably i.e. from 3.7 percent in 2005-06 to 2.1 percent in 2009-10. Indicating a positive trend of financial soundness.
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Sector
wise analysis of NPAs shows that the proportion of NPAs for the priority sector loan has increased on an average i.e. 57.1 percent compared to 41.7 percent to non priority sector and only 0.94 percent to public sector. Specific recovery targets wise monthly, quarterly, and annually were fixed, but these targets neither monitored properly nor achieved regularly.
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SUGGESTIONS
Third
Basel Committee report on banking supervision should be completely implemented in regular practices of the bank IFRS accounting practices need to be adopted to have more transparent and effective accounting system. Introducing KYC norms effectively & client profile cards to have proper monitoring system. It is better to discourage too ambitious loan proposal where ambitious projects and over enthusiastic promoters involved, it may take longer gestation period to implement the project & which invents high risk.
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NPAs
management cell can be constituted at Head Office and Branch Offices to monitor the cases. To look into the NPA Portfolio of every branch. The problem should be identified very early so that companies can try their best to stop an asset or A/C becoming NPA. Banks should evaluate the SWOT analysis of the borrowing companies i.e. how they would face the environmental threats and opportunities with the use of their strength and weakness, and what will be their possible future growth in concerned to financial and operational performance.
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