A Project Report on Non Performing Asset of Commercial Bank in India at Idbi

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A Project Report on Non Performing Asset of Commercial Bank in India at Idbi
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    NON PERFORMING ASSET OF COMMERCIAL BANK IN INDIA ATIDBI EXECUTIVE SUMMARY The Indian commercial banks have come a long way. The development over the years withregards to branch expansion, deposit mobilization of credit facilities and other services has showntremendous growth and developments. The difficulties and the problems have also increased andone such major problem is NPA. This project is “  A STUDY ON NPA OF COMMERCIAL BANKS IN INDIA”. Objectives: ã To study the banking operations in general, in India. ã The study the various reasons for NPA in Indian banking. ã To analyze different categories of Nap’s of selected banks. ã To compare the efficiency of operations with respect to NPA between public sector  banks and private banks/ foreign banks. ã To study the various steps taken by the banks to bring down the Nap’s in respective bank branches. ã To arrive at methods to bring down NPA to acceptable level. SUGGESTIONS: 1. Fixing up the budget for profits and recovery rather than for advances. Budget oriented approachat times leads to release of credit facilities without ensuring compliance of covenants of sanction.A suitable mechanism could be drawn at each bank level to provide monetary benefits/ re-organization of the operating staff particularly for recovery in Nap’s write-off cases.2. Projects with old technology should not be considered for finance.3. Large exposure for big corporate/single project should be avoided. Babasabpatilfreepptmba.com Page 1    4. There is a need for shift in PSB’s approach from collateral security to viability of the project andintrinsic strength of the promoters.5. Up gradation of credit skills of the operating staff working in advance.6. Timely sanction/ release to avoid time and cost overruns.7. It is suggested for possible restructuring of banks through mergers and acquisitions to keepthemselves competitive in the high credit risk market in India.8. Possibly one time solution like Asset Reconstruction Fund (ARF) may be relevant India.9. Unless the magnitude f NPA’s is brought down and ROA levels improved banks may not beable to infuse the confidence in the market in general and capital market in particular order to meettheir capital adequacy needs. Limitations: ã The study is based mostly on secondary data. ã Collection of primary data has been difficult due to time and corporate location. It has beengenerated with the help of secondary data. ã Data has been drawn from journals, so information may not be complete. CONCLUSION: An attempt is made in this study to present a comprehensive picture of non-performing advances of commercial banks in India, touching upon various quantitative and qualitative trends in the postreform period, besides carrying out with some policy and strategic implications. Undoubtedly Indiais one of the few countries where NPA levels are very high as there is an increase in the percentageof gross advances eroding their ROA by major basic points, after netting the provision. The net    NON PERFORMING ASSET OF COMMERCIAL BANK IN INDIA ATIDBI  NPA’s constitute a major percentage of the tangible net worth of the public sector banks, whichrepresent a huge chunk of the banking system business. Not withstanding a lower proportion of  NPA’s.Private banks NPA’s has shown a sudden spurt in the recent years making them vulnerable. The proportion of credit risk among the priority sector advances is double that of non-priority advancesimplying the irrationality of (administered) price controls, which still exists in some form. Babasabpatilfreepptmba.com Page 3    CHAPTER SCHEME 1. THEORETICAL BACK GROUND:- To banking industry. This chapter contains history, types, functions and roleof banks in economic development structure and performance of Indian banks. It also includes thelegal aspect of the Indian banking system.2. RESEARCH DESIGN:- Based on the statement of the problem, objectives, scope of the study,limitations, research methodology and operational definitions.3. INTRODUCTION TO NPA:- Contains meaning, reasons and NPA’s in commercial banks. It focuses on thegross and the net NPA’s in public, private and foreign banks.4. ANALYSIS AND INTERPRETATION:- It is the analysis and overview part of the study. The graphs are based on thetables and so is the analysis. (Quadrant analysis used where the banks are put in 4 quadrants)5. SUGGESTIONS AND CONCLUSION:- Conclusion can be drawn from the findings and some suggestions are given tocontrol NPA’s.6. ANNEXURES & BIBLIOGRAPHY:-This part deals with the collection of the data.
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