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A PROJECT REPORT ON A PROJECT STUDY ON “NPA MANAGEMENT IN BANKS”
ALLAHABAD BANK Submitted for partial fulfillment of award of Post Graduate Diploma in Management
SUBMITTED BY:MANISH KUMAR ENROLLMENT NO: - 208224 PROJECT GUIDE: - Digvijay Singh
SHIVA INSTITUTE OF MANAGEMENT STUDIES GHAZIABAD July, 2009 In Partial Fulfillment of the Requirement for the Award of Two Year Full Time Post Graduate Diploma in Business Management. (Equivalent to MBA) 2008-2010 TABLE OF CONTENT CERTIFICATE OF THE COMPANY ACKNOWLEDGE PREFACE
Chapter 1:- Introduction: Executive summary of the project
Chapter 2:- Industry Introduction &Allahabad Bank Industry introduction Allahabad Bank: All About Industry/Bank performance Correlation between Industry and Allahabad Bank Movement Chapter 3:-Research Methodology Significance of the study Objective of the study Scope of the study Tools & techniques used Applied principles and concepts Sources of primary and secondary data Data collection Statistical analysis IDBI BANK LTD.
Theoretical interpretations Findings Chapter 4:- Conclusions and Recommendations Appendix 1: Questionnaire Appendix 2: Bibliography
ACKNOWLEDGEMENT I would like to express my gratitude to all those who gave me the opportunity to complete this project. I would like to thank my institute authorities and my internal guide …Renuka verma…… first for providing me the opportunity to work with one of the prestigious organizations .I want to thank the head of Training Department Shobhit yadav for giving me permission to commence the summer training project in the first instance, to do necessary research work and to use departmental data and resources.
I would like to thank the company guide …Digvijay singh and other executives Who gave and confirmed this permission and encouraged me to go ahead with my training .I am bound to thank other staff for their stimulating support.
I am deeply indebted to my faculty Guide whose constant help, stimulating suggestions and encouragement helped me in giving the final shape to this project.
I would like to give my special thanks to my parents; their constant support enabled me to complete their project work.
Decision making is a fundamental part of the research process. Decisions regarding that what you want to do, how you want to do, What tools and techniques must be used for the successful Completion of the project. In fact it is the researcher’s efficiency as a decision maker that makes project fruitful for those who concern to the area of study. Basically when we are playing with computer in every part of life, I Used it in my project not for the ease of my but for the ease of result explanation to those who will read this project. The project Presents the role of financial system in life of persons. I had toiled to achieve the goals desired. Being a neophyte in this highly competitive world of business, I had come across several difficulties to make the objectives a reality. I am presenting this hand carved efforts in black and white. If anywhere something is Found not in tandem to the theme then you are welcome with your
Chapter 1:- Introduction: Executive summary of the project After liberalization the Indian banking sector developed very appreciate. The RBI also nationalized good amount of commercial banks proving socio economic services to the people of the nation. The public Sector banks have shown very good performance as far as the financial operations are concerned. If we look to the glance of the financial operation, We may find that deposit of public to the public sector Banks have increased from 859, 461, 95 crore to 1, 079, 393, 81 crore in 2003, the investments of the public sector Banks have increased from 349,107.81 crore to 545,509.00 crore , and however the advances have also been increased to 549,351.16crore from 414,989.36crore in 2003. The total income of the public sector banks has also shown good performance since the last few years and currently it is 128,464.40crore.The public sector Banks have also shown comparately good result. The gross profits of the public sector Banks Currently29, 715,26crore which has been doubled to the last to last year, and the net profit Of the public sector Banks is 12,295,47crore.However, the only problem of the public sector Banks these days are the Increasing level of the non performing assets. The non performing assets. The non performing assets of the public Sector banks have been increasing regularly year by year. If we glance on the numbers of performing assets we may come to know that in the year 1997 the NPAs were 437,300crore
and reached to 80.24crore in 2002. The only problem that hampers the possible financial performance of the public Sector Banks is the increasing results of the non performing assets. The non performing assets impacts drastically to the working of the banks .The efficiency of a bank is not always reflected only by the size of its Balance sheet but buy the level of return on its assets. NPAs do not generate interest income for its Bank, but at the same time banks are required to make provisions for such NPAs from their current profits. NPAs have deleterious effect on the return on assets in several ways: --(1) They erode current profits through provisioning requirements (2) They result in reduced interest income (3) They require higher providing requirements affecting profits and accretion to Capital funds recycling of funds, set in asset-liability mismatches, etc. The RBI has also tried to develop many schemes and tools to reduce the non Performing assets the results are not up to the expectations. To improve NPAs each bank should be motivated to introduce their own precautionary steps. Before lending the banks must evaluate the feasible financial and operational prospective results of the borrowing companies by keeping in Considerations the overall impacts all the factors that influence the business.
Chapter 2:- Industry Introduction &Allahabad Bank INDUSTRY INTRODUCTION
The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949 can be broadly classified into two major Categories, non-scheduled banks and scheduled banks. Scheduled banks Comprise commercial banks and the co-operative banks. In terms of Ownership, commercial banks can be further grouped into nationalized Banks, the State Bank of India and its group banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These Banks have over 67,000 branches spread across the country in every city and villages of all nook and corners of the land. The first phase of financial reforms resulted in the nationalization of 14 major Banks in 1969 and resulted in a shift from Class banking to Mass Banking. This in turn resulted in a significant growth in the geographical Coverage of banks. Every bank had to earmark a minimum percentage of their loan portfolio to sectors identified as “priority sectors”. The Manufacturing sector also grew during the 1970s in protected environs the banking sector was a critical source. The next wave of reforms saw the nationalization of 6 more commercial banks in 1980. Since then the number of scheduled commercial banks increased four-fold and the number of bank branches increased eight-fold. And that was not the limit of growth. After the second phase of financial sector reforms and liberalization of the sector in the early nineties, the Public Sector Banks (PSB) s found it extremely difficult to compete with the new private sector banks and the foreign banks. The new private sector banks first made their appearance after the guidelines permitting them were issued in January 1993. Eight New private sector banks are presently in operation. These banks due to their late start has access to state-of-the-art technology, which in turn helps them to save on manpower costs. During the year 2000, the State Bank of India (SBI) and its 7 associates accounted for a 25 percent share in deposits and 28.1 percent share in Credit. The 20 nationalized banks accounted for 53.2 percent of the deposits and 47.5 percent of credit during the same period. The
share of foreign banks (numbering 42), regional rural banks and other scheduled Commercial banks accounted for 5.7 percent, 3.9 percent and 12.2 percent respectively in deposits and 8.41 percent, 3.14 percent and B12.85 percent respectively in credit during the year 2000.about the detail Of the current scenario we will go through the trends in modern economy Of the country. Current Scenario: The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the Indian Banking system are in the process of shedding their flab in terms of excessive manpower, excessive non Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private sector banks are consolidating themselves through mergers and acquisitions. PSBs, which currently account for more than 78 percent of total banking industry assets are saddled with NPAs (a mindboggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern technology and a massive workforce while the new private sector banks are forging ahead and rewriting the traditional banking business model by way of their sheer innovation and service. The PSBs are of course currently working out challenging strategies even as 20 percent of their massive employee strength has dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes. The private players however cannot match the PSB’s great reach, great size and access to low cost deposits. Therefore one of the means for them to combat the PSBs has been through the merger and acquisition (M& A) route. Over the last two years, the industry has witnessed several such instances. For instance, HDFC Bank’s merger with Times Bank Icici Bank’s acquisition of ITC Classic, Anagram Finance and Bank of Madurai. Centurion Bank, Indusind Bank, Bank of Punjab, Vysya Bank are said to be on the lookout. The UTI bank- Global Trust Bank merger
however opened a Pandora ’s Box and brought about the realization that all was not well in the functioning of many of the private sector banks. Private sector Banks have pioneered internet banking, phone banking, anywhere banking, mobile banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled employees in the aftermath of successful VRS schemes. Also, following India’s commitment to the W To agreement in LTD. respect of the services sector, foreign banks, including both new and the existing ones, have been permitted to open up to 12 branches a year with effect from 1998-99 as against the earlier stipulation of 8 branches. Tasks of government diluting their equity from 51 percent to 33 percent in November 2000 has also opened up a new opportunity for the takeover of even the PSBs. The FDI rules being more rationalized in Q1FY02 may also pave the way for foreign banks taking the M& A route to acquire willing Indian partners. Meanwhile the economic and corporate sector slowdown has led to an increasing number of banks focusing on the retail segment. Many of them are also entering the new vistas of Insurance. Banks with their phenomenal reach and a regular interface with the retail investor are the best placed to enter into the insurance sector. Banks in India have been allowed to provide fee-based insurance services without risk participation, invest in an insurance company for providing infrastructure and services support and set up of a separate joint venture insurance company with risk participation. Aggregate Performance of the Banking Industry Aggregate deposits of scheduled commercial banks increased at a compounded annual average growth rate (Cagr) of 17.8 percent during K LTD.
1969-99, while bank credit expanded at a Cagr of 16.3 percent per annum. Banks’ investments in government and other approved securities recorded a Cagr of 18.8 percent per annum during the same period. In FY01 the economic slowdown resulted in a Gross Domestic Product (GDP) growth of only 6.0 percent as against the previous year’s 6.4 percent. The WPI Index (a measure of inflation) increased by 7.1 percent against 3.3 percent in FY00. Similarly, money supply (M3) grew by around 16.2 percent as against 14.6 percent a year ago. The growth in aggregate deposits of the scheduled commercial banks at 15.4 percent in FY01 percent was lower than that of 19.3 percent in the previous year, while the growth in credit by SCBs slowed down to 15.6 percent in FY01 against 23 percent a year ago. The industrial slowdown also affected the earnings of listed banks. The net profits of 20 listed banks dropped by 34.43 percent in the quarter ended March 2001. Net profits grew by 40.75 percent in the first quarter of 2000-2001, but dropped to 4.56 percent in the fourth quarter of 20002001. IDBI BANK LTD. On the Capital Adequacy Ratio (CAR) front while most banks managed to fulfill the norms, it was a feat achieved with its own share of difficulties. The CAR, which at present is 9.0 percent, is likely to be hiked to 12.0 percent by the year 2004 based on the Basle Committee recommendations. Any bank that wishes to grow its assets needs to also shore up its capital at the same time so that its capital as a percentage of the risk-weighted assets is maintained at the stipulated rate. While the IPO route was a much-fancied one in the early ‘90s, the current scenario doesn’t look too attractive for bank majors. Consequently, banks have been forced to explore other avenues to shore up their capital base. While some are wooing foreign partners to add to the capital others are employing the M& A route. Many are also going in for right issues at prices considerably lower than the market prices to woo the investors.
Interest Rate Scene The two years, post the East Asian crises in 1997-98 saw a climb in the global interest rates. It was only in the later half of FY01 that the US Fed cut interest rates. India has however IDBI BANK LTD. remained more or less insulated. The past 2 years in our country was characterized by a mounting intention of the Reserve Bank Of India (RBI) to steadily reduce interest rates resulting in a narrowing differential between global and domestic rates. The RBI has been affecting bank rate and CRR cuts at regular intervals to improve liquidity and reduce rates. The only exception was in July 2000 when the RBI increased the Cash Reserve Ratio (CRR) to stem the fall in the rupee against the dollar. The steady fall in the interest rates resulted in squeezed margins for the banks in general. Governmental Policy: After the first phase and second phase of financial reforms, in the 1980s commercial banks began to function in a highly regulated environment, with administered interest rate structure, quantitative restrictions on credit flows, high reserve requirements and reservation of a significant proportion of lendable resources for the priority and the government sectors. The restrictive regulatory norms led to the credit rationing for the private sector and the interest rate controls led to the unproductive use of credit and low levels of investment and growth. The resultant financial repression’ led to decline in productivity and efficiency and erosion of profitability of the banking sector in general. This was when the need to develop a sound commercial banking system was felt. This was worked out mainly with the help of the recommendations of the Committee on the Financial System (Chairman: Shri M. Narasimham), 1991. The resultant financial sector reforms called for interest rate
flexibility for banks, reduction in reserve requirements, and a number of structural measures. Interest rates have thus been steadily deregulated in the past few years with banks being free to fix their Prime Lending Rates(PLRs) and deposit rates for most banking products. Credit market reforms included introduction of new instruments of credit, changes in the credit delivery system and integration of functional roles of diverse players, such as, banks, financial institutions and non-banking financial companies (Nbfcs). Domestic Private Sector Banks were allowed to be set up, PSBs were allowed to access the markets to shore up their Cars. Implications Of Some Recent Policy Measures: The allowing of PSBs to shed manpower and dilution of equity are moves that will lend greater autonomy to the industry. In order to lend more IDBI BANK LTD. depth to the capital markets the RBI had in November 2000 also changed the capital market exposure norms from 5 percent of bank’s incremental deposits of the previous year to 5 percent of the bank’s total domestic credit in the previous year. But this move did not have the desired effect, as in, while most banks kept away almost completely from the capital markets, a few private sector banks went overboard and exceeded limits and indulged in dubious stock market deals. The chances of seeing banks making a comeback to the stock markets are therefore quite unlikely in the near future. The move to increase Foreign Direct Investment FDI limits to 49 percent from 20 percent during the first quarter of this fiscal came as a welcome announcement to foreign players wanting to get a foot hold in the Indian Markets by investing in willing Indian partners who are starved of net worth to meet CAR norms. Ceiling for FII investment in companies was also increased from 24.0 percent to 49.0 percent and have been included within the ambit of FDI investment.
BANK & MANAGEMENT HISTORY & BACKGROUND OF THE BANK Allahabad Bank, the oldest joint Stock Bank of the country, was set up in the historic town of Allahabad on April 24, 1865 by a Group of Europeans. At that juncture, in India, organized industry, trade and banking had just started taking shape. The Bank was started with a subscribed capital of Rs. 2 lacks and by the end of 19th century, it had branches at Jhansi, Kanpur, Luck now, Bareilly, Nainital, Kolkata and Delhi. In the early 20th century, with the start of Swadeshi Movement, Allahabad Bank witnessed a spurt in deposits and the reserves increased to over Rs. 30 lacks by 1910. In 1920, the Bank was taken over by P&O Banking Corporation at a bid price of Rs. 436 per share. The Head Office and the Registered Office of the Bank were then shifted to Kolkata in 1923 for business considerations and operational convenience. In 1927, the Bank went into the fold of Chartered Bank that acquired the controlling interest in the P&O Banking Corporation. The Bank passed through the critical period of ‘Great Depression’ during the early thirties, which caused a general stagnation in the global markets, without sparing the Indian Banking Industry. The Bank dovetailed its functioning in accordance with the exigencies of the Five Year Plans, which were started in 1951. In the post independence era, Allahabad Bank maintained a steady growth and by 1964, the Bank had opened its 100th branch. On July 19, 1969, along with 13 other major commercial banks, Allahabad Bank was nationalized. At the time of nationalization, the Bank had a network of 151 branches, deposits of Rs. 114 crore and advances of Rs. 82 crore to its credit.
With nationalization, the Bank spread its activities in the rural, unbanked and under-banked areas. At the end of 1979, the branch network of the Bank increased to 875 with the share of rural branches being 46.40%. Deposits of the Bank grew to Rs. 735 crore at the end of 1979 while advances rose to Rs. 407 crore. In order to bolster the rural economy, a plethora of Social Banking Schemes was introduced. Thus, Lead Bank Scheme (1969), Regional Rural Banks (1975), Twenty-point Programmed (1975), New 20-point Programme (1981), Integrated Rural Development Program me (1980) etc. were introduced in the Indian Banking industry. Directed lending to priority sectors, weaker sections, Scheduled Castes/ Scheduled Tribes and Other Backward Castes were given a greater thrust and the Bank responded to this initiative and increased its presence in these areas also. As on March 31, 2007 the Bank’s priority sector credit stood at Rs. 16230 crore, forming 38.7% of net bank credit and agriculture credit was over Rs. 7200 crore constituting 17.2% of net credit. The Bank opened its 1000th. Branch on April 03, 1982. The Bank had also started opening specialized branches such as Industrial Finance Branches, International Branches, SSI Finance Branches, Recovery Branches etc. The Bank made a foray into merchant banking activity in 1984 and subsequently transferred the merchant banking activities to All Bank Finance Limited, a wholly owned Subsidiary, in 1991. All Bank Finance Limited was registered as a Category-I Merchant Banker with SEBI and undertook activities such as project advisory services, loan syndication, issue management, leasing, trusteeship and portfolio investment services. Consequent upon the SEBI Rules and Regulations notified on December 09, 1997 for segregation of Capital Market and fund based activities into separate entities, the Company surrendered its Merchant Banking registration with SEBI with effect from July 01, 1998 and got itself registered as a NBFC with RBI on August 21, 1998. In October 1989, United Industrial Bank Limited was amalgamated into Allahabad Bank . The Board of Directors of the Bank had earlier taken a decision to merge the subsidiary company with the
Bank. But subsequently in view of emerging capital market Allahabad Bank decided to revive the Company. It was thought prudent to go for fee-based activities. Accordingly, the NBFC license held by the Company was surrendered to the RBI and the Company has registered itself as category 1 Merchant Banker with the SEBI. The Company is now engaged in only Merchant Banking activities. One of the major challenges faced by the Bank was the accumulated losses incurred by it for three consecutive years, i.e. from 1992- 93 to 1994-95, owing to the adoption of prudential accounting norms, in line with RBI directives. To overcome this situation and to strengthen the bank in various functional areas, a major revamping exercise was initiated. The Bank put a greater thrust on areas like technological up-gradation & modernization, improvement in customer service, credit management with focus to reduce nonperforming assets etc. The Bank staged a turnaround in 1995-96 with a net profit of Rs. 5.62 crore, which has increased to Rs. 750.14 crore in 2006-07. The Bank launched “Gold Trading” with the approval of Reserve Bank of India for import of gold under open general license. The Bank became the first nationalized bank in Eastern India to become a depository participant of National Securities Depository Limited (NSDL) to offer demat and related services and initiated “Flexi-fix Deposit Scheme” to mobilize resources. The Bank also introduced “Kisan Card” to facilitate agriculture related activities as well as to meet the domestic requirements of farmers. In order to boost credit off-take, the Bank has launched user-friendly and attractive products namely, consumer finance, car finance, educational loans, personal loan etc.
The growth of the Bank over the years is given in the table below: ( RS IN CRORE) Year ended 1865 1890 1910 1930 1950 1970 1989 1999 2000 2001 2002 2003
NO of Branches 1 4 15 37 58 211 1509 1884 1893 1903 1914 1923
Paid- up Capital 0.02 0.04 0.20 0.36 0.46 1.05 57.50 246.70 246.70 246.70 246.70 346.70
Deposits 0.01 0.70 5.53 11.36 27.16 140.70 4,034.04 15,510.35 17642.10 20106.02 22665.94 25463.38
Advances 0.01 0.53 4.66 5.21 14.97 95.95 1831.77 7,057.07 8240.06 10315.80 11815.01 13486.94
2004 2005 2006 2007
1935 1951 1999 2060
346.70 346.70 446.70 446.70
31476.61 40762.08 48499.69 59544.66
16387.66 22151.51 30061.22 41913.69
PRESENT STATUS As on June 30, 2007, the Bank had 2107 branches, comprising 979 rural, 389 semi-urban, 441 urban and 298 metropolitan, which formed 46.46%, 18.46%, 20.93% and 14.15% of the total respectively. The branches include 52 specialized branches (i.e. 4 Industrial Finance Branches, 18 SSI Finance Branches, 6 International Branches, 6 Recovery Branches, 1 NRI Branch, 1 Industrial Finance cum-International Branch, 2 Specialized Personal Banking Branch, 1 Specialized Savings Bank Branch, 3 Quick Collection Service Branches and 2 Trading Finance Branches, 1 Specialized commercial agriculture, 1 Forex cum Treasury Management, 3 Agriculture Finance & 3 Regional Processing Centre (Forex) besides 19 Service Branches. The Bank has 105 Extension Counters. A number of Bank’s branches and offices are housed in the Bank’s owned premises situated at prime locations in major cities of the country. Pursuant to organizational restructuring, the Bank is currently operating with a 3tier structure since June 01, 2001 which was further restructured in November, 2004 by reducing the number of Regional Offices from 48 to 44 and renaming them as Zonal Offices, on account of synergic reasons and improvement in level of efficiency, reduction in overhead cost and other operating expenditures. Out of the seven Regional Rural Banks (RRBs) sponsored by the Bank, six RRBs operating in Uttar Pradesh have been amalgamated into Luck now Kshetriya Gramin Bank (LKGB) and Triveni Kshetriya Gramin Bank (LKGB) with effect
from 1st March 2006. Thus the number of sponsored RRBs stand at 3; 2 in Uttar Pradesh and one in Madhya Pradesh.The Bank has been entrusted with State Level Bankers’ Committee (SLBC) convener ship in the newly formed state of Jharkhand. The Bank is continuing its utmost endeavor for economic uplift-ment of the state through its various developmental programmes. The Bank has set up a residential institute in the name of Birsha Munda Institute of Entrepreneurship Development (BMIED) at Hazaribagh as a part of promotional measures for enhancement of flow of bank credit in Jharkhand State. The institute has so far imparted training to 2144 unemployed youths of which 415 trained persons received financial assistance amounting to Rs. 4.96 crore From our Bank till 3103-2007. The Bank came out with its maiden Equity IPO in the month of October 2002. The “at par” public issue evolved overwhelming response from the retail investors. The Bank mobilized more than Rs. 370 crores against the offer size of Rs. 100 crores. The number of applications from retail investors in the issue exceeded 2.23 lacs. After the issue, the holding of the Government of India came Down to 71.16%. Capital Adequacy Ratio improved to 11.15% as on March 31, 2003 due to increase in capital through maiden equity Public issue. The Bank came out with its follow-on Equity public offer in the month of April 2005 through book building route. The issue Demonstrated a repeated overwhelming response from the investors. The Bank mobilized more than Rs. 7380 crores against the Offer size of Rs.820 crores. After the issue, the holding of the Government of India came down to 55.23%. Capital Adequacy Ratio Improved to 13.80% as on June 30, 2005 due to increase in capital through follow-on equity public issue.
The Bank’s performance was noticeable in implementation of ‘Kisan Credit Card’ launched on 01.09.1998 to ensure easy and timely Supply of credit to farmers for their short-term working capital requirements for agricultural activities and also for domestic requirements e.g. education, consumable items, medical expenses etc. of its existing clients. The Bank received third prize for Exceeding the disbursement target in 2000-01. The Bank issued 176876 Kisan Credit Cards involving a credit limit of Rs. 882.73crores during 2006-07. The cumulative KCC numbered 940799 with a credit limit of Rs.3393.08 crores as on 31-03-2007. With the ‘Kisan Credit Card’ a new feature of Group Personal Accident Insurance cover has been provided. The Bank has been giving much importance to Human Resource Development. It has sent some Officers for overseas training also. Computerization and automation of operations continued to receive focused attention from the Bank. The Bank has 2097 computerized branches/ extension counters, which covers about 99.99% of total branches/extension counters as on June 30, 2007 in addition to 208 ATMs. The bank has entered into tie up with VISA for issuance of Debit Cards and with aggressive marketing strategies. The bank has already issued 2.30 lakhs International ATM Debit Cards. M/S TCS has been selected as the system integrator for implementation of CBS in 900 branches of our Bank. 21 branches (including 18 pilot branches) and 3 RPCs have already been made live under CBS as on 30-06-2007. The Bank has undertaken strategic planning in order to become one of the strongest banks in the country in near future through both product and geographical diversification. For this purpose tie up arrangement have been made/ being negotiated with various insurance companies and mutual funds such as Franklin Templeton, Kotak Mahindra, PNB Mutual Funds, Life Insurance Corporation, UTI Mutual Fund etc. The Bank has opened its maiden overseas branch at Hong Kong and also representative office at Shenzhen, China. With the Approval from Reserve Bank of India, General insurance business is in the offing under Joint venture with Indian Overseas Bank, Karnataka Bank Ltd, Dabour Ltd and Sampo Japan.
Structure of Indian Banking Industry
The formal banking system in India comprises the Reserve Bank of India, commercial banks, regional rural banks and the cooperative banks. In the recent past, private non-banking finance companies also have been active in the financial system, and are being regulated by the RBI. Today the overall Commercial banking system in india may be distinguished into: (1) Public Sector Banks (2) Private Sector Banks (3) Co-operative Sector Banks
PUBLIC SECTOR BANKS a. State Bank of India and its associate banks called the state Bank group. b. 20 nationalized banks c. Regional Rural Banks mainly sponsored by Public Banks
PRIVATE SECTOR BANKS a. b. c. d. e. Old generation private banks New generation private banks Foreign banks in India Scheduled Co-operative Banks Non-scheduled Banks
CO-OPERATIVE SECTOR The Co-operative banking sector has been developed in the country to the supplement the village money lender. The co-operative banking sector in india is divided into 4 components. 1. 2. 3. 4. 5. 6. 7.
State Co-operative Banks Central Co-operative Banks Primary Agriculture Credit societies Land Development Banks Urban Co-operative Banks Primary Agricultural Development Banks Primary Land Development Banks State Land Development Banks
DEVELOPMENT BANKS Industrial Finance Corporation India (IFCI) 2. Industrial Development Bank of India (IDBI) 3. Industrial Credit and Investment Corporation of India (ICICI) 4. Industrial Investment Bank of India (IIBI)
5. 6. 7. 8. 9.
Small Industries Development Bank of India(SIDBI) SCICI Ltd. National Bank for Agriculture and Rural Development(NABARD) Export Import Bank of India National Housing Bank PUBLIC SECTOR BANKS Allahabad Bank 2. Andhra Bank 3. Bank of Baroda 4. Bank of India 5. Bank of Maharashtra 6. Canara Bank 7. Central Bank of India 8. Corporation Bank 9. Dena Bank 10.Indian Bank 11.Indian Overseas Bank 12.Punjab National Bank 13.Punjab and Sind Bank 14.Vijaya Bank 15.United Bank of India 16.Union Bank of India 17.Syndicate Bank 18.Oriental Bank of commerce 19.Uco Bank 20. State Bank of India 21.State Bank of India &Associate 1.State Bank of Hyderabad
2.State Bank of Bikaner&Jaipur 3.State Bank of Saurashtra 4. State Bank of Indore 5.State Bank of Mysore 6.State bank Of Patila 7.State Bank of Travancore
MAIN OBJECTS OF THE BANK The main object and business of the Bank, as laid down in the Bank Nationalization Act is as under: The main object of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 under which the undertaking of the Bank was taken over by the Central Government is as under: “An Act to provide for the acquisition and transfer of the undertakings of certain Banking Companies, having regard to their size, resources, coverage and organization, in order to control the heights of the economy and to meet progressively, and serve better, the needs of the development of the economy, in conformity with national policy and objectives and for matters connected therewith or incidental thereto”. The Main Object of the Bank enables it to undertake the activities for which the funds are being raised and the activities, which it has been carrying on till date. Business Sphere of the Bank The Bank shall carry on and transact the business of Banking as defined in Clause (b) of Section 5 of the Banking Regulation Act, 1949, and may engage in
one or more of the other forms of business specified in Sub-Section (1) of Section 6 of that Act. Clause (b) of Section 5 of the Banking Regulation Act, 1949 defines Banking as "the accepting for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw able by cheque, draft, order or otherwise." Other Business that the Bank may undertake (Section 3 (7)) Sections 3 (7) of Chapter II of the Banking Companies (Acquisition) Act 1970 provides for the Bank to act as Agent of Reserve Bank.
The Bank shall, if so required by the Reserve Bank of India, act as agent of the Reserve Bank at all places in India where it has a branch:
a. Paying, receiving, collecting and remitting money, bullion and securities on behalf of the Government of India b. Undertaking and transacting any other business which the Reserve Bank may from time to time entrust to it .
The terms and conditions on which any such agency business shall be carried on by the corresponding new Bank on behalf of the Reserve Bank shall be such as may be agreed upon. If no agreement can be reached on any matter referred to in Clause (2) above, or if a dispute arises between the corresponding new Bank and the Reserve Bank as to the interpretation of any agreement between them, the matter shall be referred to the Central Government and the decision of the Central Government, thereon, shall be final.
4. The corresponding new Bank may transact any business or perform any function entrusted to it under Clause (1) by itself or through any agent approved by the Reserve Bank. CORPORATE STRATEGY The globalization of the economy and financial sector reforms have resulted in increased competition and thin margins. To achieve the corporate goal, the following strategies have been planned: 1. Proliferate the Bank’s business 2. Increase the banks' non-fund and non-interest income 3. Offer affable customer service 4. Open more specialized branches and expand personal banking, quick collection service, retail banking, forex banking, small scale industrial finance etc. 5. Use technology to boost credit off-take 6. Sharpen efficiency and efficacy 7. Reduction of non-performing assets MISSION & VISION OF THE BANK MISSION To ensure anywhere and anytime Banking for the customer with latest state- ofart technology and by developing effective customer centric relationship and to emerge as a world-class service provider through efficient utilization of human resources and Product innovation.
VISION To put the Bank on higher growth path by building a strong customer-base through Talent Management, Induction of State of art Technology and through Structural Reorganization. COMPETITIVE STRENGTHS Many new banks, both private and foreign, have entered the industry and offer new and innovative products at competitive rates. In this scenario, Allahabad Bank believes that its competitive advantages are: a) Rich tradition of more than 142 years b) Large and loyal customer base c) Wide branch network d) Specialized branches to cope with modern demand pattern e) Diversified product portfolio f) Committed and experienced work force g) Technology Allahabad Bank CORPORATE FOCUS The corporate focus of the Bank is: a) To improve efficiency to face competition especially in metropolitan and urban centers b) To increase productivity c) To augment its market share of banking system deposits d) To develop its management information system e) To reduce NPAs
f) To improve systems and control g) To upgrade products and services h) To provide adequate credit support to industry, trade and priority sector BUSINESS OF THE BANK & ITS PRODUCTS AND SERVICES Other than the offering traditional banking products such as corporate loans, the Bank has made its presence felt by introducing certain new products and value added services while continuing to popularize the existing products. Some of these new products are: (a) Retail Banking Boutiques: In the year 2000, Allahabad Bank came out with a unique strategy for marketing its retail loans by putting in place dedicated Retail Banking Boutiques at potential centers across the country to act as exclusive delivery channels of various Retail Finance Schemes. The Bank posted young & dynamic officers in these boutiques and delegated them with adequate authority to sanction loan proposals related to the various schemes on the spot. These officers were also exposed to specialized training not only to serve the customer better but also to sell the retail products, if need be, by adopting door to door campaign. Total number of Boutiques was 127 with an outstanding of Rs. 2561.18 crores as on June 30, 2007. During the quarter ended June 2007,the total disbursement under the various retail finance schemes was Rs. 211.77 crores. Brief description of the Bank’s retail schemes is as under –
Scheme Allahabad Bank Personal Loan scheme
Details Loan for purchase of entire range of consumer durable, purchase of two wheeler any other
tangible items. 2 3 4 5 6 Allahabad Bank personal loan scheme for pensioners Allahabad Bank personal Loan scheme for doctors Allahabad Bank Housing Finance Scheme Allahabad Bank car Finance Scheme Allahabad Bank Loan against NSC/ KVP Overdraft Facility in Savings Bank A/Cs Allahabad Bank’ Educational Loan Scheme All Bank-Property Scheme All Bank Gold Loan Scheme Loan for meeting personal needs without assigning any specific purpose. Loan for any personal purpose including purpose including purpose for meeting expenses of professional requirement. Loan for construction of residential house on land already owned. For purchase of new as well as pre owned multi utility vehicle for personal use.
Loan against NSC/ KVP for any business/ personal purpose. To meet immediate exigencies of salaried Persons To provide financial assistance on reasonable terms to the poor and needy to undertake basic education and to meritorious students to pursue higher/professional / technical education. Loan for meeting credit needs of business by offering building as security in the form of equitable mortgage . Loan for any purpose for meeting credit needs by offering Gold ornaments as security.
(b) Loans on Internet: The Bank sanctions educational loans and car loans via Internet. The educational loan facility granted by the Bank was launched in 1997 and was subsequently made possible via Internet during 1999. Facility to apply for educational loan on Internet for education loan is available to the students of leading institutions like IIMs, IITs, Indian Institute of Science Bangalore, Jamunalal Bajaj Institute of Management Mumbai, XLRI Jamshedpur & Indian School of Mines Dhanbad. Bank has so far sanctioned 1014 educational loans amounting to more than Rs. 29.28 crore through Internet. (d) Kisan Credit Card: The card aims to provide adequate and timely financial assistance to the farmers for their agricultural activities amongst other requirements. During the year 2006-07, the Bank issued 176876 cards. The cumulative KCC numbered 940799 with a credit limit of Rs. 3393.08 crores as on 31-03-2007 The Bank is also providing Group/Personal Accident insurance cover to the holders of the Kisan Credit Card. Also on 140th foundation day of Bank (April 24, 2004) new scheme by name of Kisan Shakti Yojana (KSY) was launched. The scheme allowed the farmers to have flexibility and choice in regards to selection of credit for agriculture, allied activities and domestic and personnel purpose. Allahabad Bank The Bank had extended credit facility under the scheme to 43719 Kisan credit cardholders involving credit limit of Rs. 574.96 crores as on March 31,2007. Cumulative number of Kishan Credit cardholders financed under the scheme was 138937 involving 1809.28 Crore as on 31-03-2007. (e) Depository Services: The Bank has had the distinction of being the first nationalized Bank in the eastern region to be a depository participant of NSDL at
Kolkata to offer Demat and other related services to its customers in 1998. . The Bank had further spread its DP services to its customers by opening DP at Luck now, Kanpur and Varanasi under agreement with CDSL. The bank also opened its first Branch DP at Mumbai with main DP at Kolkata Main Branch. The Bank earned an income of Rs. 80.37 lacks from 23913 accounts in financial year 2006-07 and Rs. 60.08 lacks from 19720 accounts during quarter ending June 2007. The Bank is going to start a Branch DP at New Delhi very soon, which will be connected through Back Office software at Kolkata Main DP. (f) Flexi- Fix Deposit Scheme: This scheme was launched to provide liquidity of a savings bank account and higher yield of a fixed deposit. (g) Banc-assurance: The Bank has entered into tie up arrangement with Life Insurance Corporation of India for Life Insurance and with National Insurance Company Limited and ECGC for Non-life Insurance and Export Credit Insurance for selling of their products through its branches. The Bank is also providing life insurance cover to the extent of Rs. 1.00 lacks to its depositors in association with LICI on payment of a very nominal premium. The Bank also has tie up arrangements with LICI for coverage of housing loans and Educational loans being provided by our branches. The Bank is providing free group personal accidental coverage of Rs. 1.00 lacks to SB Account holders maintaining an average monthly balance of Rs. 5000/- as well as to all its ATM cardholders. The bank has earned an income of Rs. 767 lacks from Ban assurance during FY a 2006-07 and Rs. 100 lacks in the first quarter of current FY i.e. June 2007. The Bank has entered into tie up arrangement with UTI-AMC, Principal-PNB AMC, Kotak- Mahindra AMC and Reliance Capital Asset Management Ltd. for selling of their Mutual Fund Products through our branches. This has generated
an income of Rs. 62.09 lacks during FY 2006-07 and Rs. 38.19 lacks during first quarter of current FY. (h) Other Services: The Bank has also been providing Cash Management services through its QCS Branches/Centers at Kolkata, New Delhi, Mumbai, Luck now and Chennai. Under CMS activities, the Bank is providing Local Cheque collection service, Collect and pay service, assured credit up to day 7 to various private and other Banks as well as to corporate clients. The bank has earned an income of Rs. 355.19 lacks during FY 2006-07 and Rs. 94.12 lacks in the first quarter of current FY.For expansion of CMS business, the Bank is in the process of opening of Local Cheque Collection Hubs at 18 strategic locations, which will be linked with existing QCS Branches/Centre’s. BRANCH NETWORK OF THE BANK The Bank has 44 zonal offices, controlling 2107 branches and 105 extension counters as on June 30, 2007, including 52 specialized branches. The population group wise break up of branches of the Bank in India is as under: Population Group Number of Branches % Share to Total Rural Semi-Urban Urban Metropolitan Total 979 389 441 298 2107 46.46 18.45 20.93 14.15 100.00
Geographical distribution of the branches of the Bank as under:State/union Territory Number of Branches % Share Total 0.05 1.47 2.94 7.17 0.19 1.33 2.33 0.05 1.28 1.42 0.28
Andaman& Nicobar Island 1 Andhra Pradesh Assam Bihar Chandigarh Chhattisgarh Delhi Goa Gujarat Haryana Himachal Pradesh 31 62 151 4 28 49 1 27 30 6
Jammu &Kashmir Jharkhand Karnataka
4 100 19
0.19 4.75 0.90
Kerala Madhya Pradesh Maharashtra Manipur Meghalaya Nagaland Orissa Pondicherry Punjab Rajasthan Sikkim Tamil Nadu Tripura Uttar Pradesh Uttaranchal West Bengal TOTAL
6 150 86 1 1 4 68 1 46 48 1 32 1 673 20 456 2107
0.28 0.19 4.08 0.05 0.05 0.19 3.23 0.05 2.18 2.28 0.05 1.52 0.05 31.93 0.95 21.64 100.00
Performance of Allahabad Bank (2008-2009) Business
(2) (3) (4)
The business of Allahabad Bank stood as RS 144415 crore as on 31.03.2009 as against RS 1,21,929 crore as on 31.3.2009 as against Rs. 1,21,929 crore corresponding previous year registering a growth 18.44% year- on – year. Deposit of the Bank went up to Rs 84972 crore as on 31.03.2009 from Rs 71616 crore as on 31.3.2008.year – on –year basis, Total Deposits grew by 18.65%. Deposits under Differential Rate and certificate of deposits have been reduced to Rs 16635 crore from Rs 19976 crore as on 31.03.2008. Gross credit to total Deposit ratio stood as 69.96% as March 2009 as against 70.25% as on 31.03.2008. Priority sector advances increased from Rs 18774 crore as on 31.032008 to Rs 20435 crore as on 31.03.2009 Agriculture credit was Rs 9,568 crore as on 31.03.2009 Business per employee rose from Rs 6.04 crore as on 31.03.2008 to Rs 7.06 crore as on 31.03,2009. Business per Branch improved from Rs 56.61 crore as on 31.03.2008 to Rs 63.90 crore during the period.
Asset Quality Of Allahabad Bank (1)
(2) (3) 38
Gross NPA declined to Rs 1.81% from 2.00% at March 08. Gross NPA stood at RS 1078.25 crore. Net NPA at Rs at .072% amounting Rs 422.11 crore.
Book value per share was Rs 131.00. Return on Asset was 0.90%. Earnings per share (EPS) was Rs 17.21 Capital Adequacy Ratio was Rs 13.11% as at March 09 against the stipulated norm of 9% speculated norms of RBI. Technological Development
Total CBS Branch 922 as 31.03.2009. More than 38000 ATMs across the country E-Payment for Direct and Indirect Taxes made available to customers all CBS branches. Human Resources of Allahabad Bank
Total manpower as the strength of the Bank was 20,457 as 31.03.2009. 11828 personnel were imparted training during the year.
ALLAHABAD BANK UNAUDITED FINANCIAL RESULTS For Nine Months ended 31st December 2008
(RS IN LAKH)
Quarter Ended (Reviewed) 31.12.2008
Quarter Ended (Reviewed) 31.12.2007 155623.33 112953.62
Nine Months Nine Months Ended Ended (Reviewed) (Reviewed) 31.12.2008 544962.25 404916.66 31.12.2007 455985.72 322785.35
Year end (Audited)
Interest Ended (a)+(b)+(c)+(d) Interest/discoun t on advances/ bill Income on investments
Interest on 117.28 balances with RBI and other inter bank funds Others Other Income Total Income(1)+(2) Interest Expended Operating 40 338.04 40840.47 129390.46 129390.46 34648.49
D 2 3 4 5
91.94 40017.73 195641.06 113821.39 29707.49
1031.11 68365.53 613327.78 388346.14 96281.23
128.78 59616.09 515580.81 322142.05 82483.94
Chapter 3 :-Research operation Significance of the study The main aim of any person is utilization money in the best manner since the India is country were more than half of the population has problem of running the family in the most efficient manner. However Indian people faced large number of problem till the development of the full-fledged banking sector. The Indian banking sector came into the developing nature mostly after the 1991 government policy. The banking sector has really helped the Indian people to utilize the single money in the best manner as they want. People now have started investing their money in the banks and banks also provide good returns on the deposited amount. The people now have at the most understood that banks provide them good security to their deposits and so excess amount are invested in the banks. Thus, banks have helped the people you achieve their socio economic objectives. The banks not only accept the deposits of the people but also provide them credit Facility for their development. Indian banking sector has the nation in developing the business and service sectors. But recently the banks are facing the problem of credit risk.It is found that many general people and business people borrow from the banks but due to some genuine or other reasons are not able to repay back the amount drawn to the banks. The amount which is not given back to the banks is known as non- performing assets which hamper the
business of the banks. Due to NPAs the income of the bank is reduced and the banks have to make large number of the provisions that would curtail the profit of the bank and debtor that the financial performance of the banks not shows good results. The main aim behind making this report is to know how public sector Banks are operating their business and how NPAs play its role to the operations of the public sector Banks. The report NPAs are classified according to the sector, industry, and state wise. The present study also focuses on the existing system in India to solve the problem of NPAs and comparative analysis to understand which bank is playing what role with concerned to NPAs.Thus, the study would help the decision makers to understand the financial performance and growth of public sectors banks are compared to the NPAs. Objective of the study Primary objective: The primary objective of the making report is: ➢ To know why NPAs are great challenge to the public sector banks. Secondary objectives: The secondary objectives of preparing this report are:
To understand what is Non performing Assets and what are the underlying reasons for the emergence of the NPAs. To understand the impacts of NPAs on the operations of the public sector Banks.
To know what steps are being taken by the Indian banking sector to reduce the NPAs? To evaluate the comparative ratios of the public sector banks with concerned to the NPAs.
Research methodology The research methodology means the way in which we would complete our prospected task. Before undertaking any task. Before undertaking any task it becomes very essential for anyone to determine the problem of study. I have adopted the following procedure in completing my report study. (1) (2) (3) (4) (5) (6) Formulating the problem Research design Determine the data sources Analyzing the data Interpretation Preparing research report (1) Formulating the problem I am interested in the banking sector and I want to my future in banking sector so decided to make my research study on banking sector. I analyzed first the factors that are important for the banking sector and I came to know that providing credit facility to the borrower is one of the important factors as far as the banking sector is concerned. On the basis of the analyzed factor, I felt that the important issue right now as far as the credit
facilities are provided by the bank is non performing assets. I started knowing about the basics of the NPAs and decide to the study on the NPAs. So, I chose the topic “NON performing Assets the great challenge before the public sector banks”. (2) Research Design The research design tells about the mode with which the entire project is prepared. My research design for the study is basically analytical. Because I have utilized the large number of data of the public sector banks. (3) Determining the data source The data source can be primary or secondary. The primary data are those data which are used for the first time in the study. However such data take place much time and are also expensive. Whereas the secondary data are those data which are already available in the market. These data are easy to search and are not expensive too for my study I have utilized totally the secondary data.
Analyzing the data The primary data would not be useful until and unless they are well edited and tabulated. When the person receives the primary data many unuseful data would also be there. So, I analyzed the data and edited them and turned them in the unuseful data would also be there. So, I analyzed the data and edited them and turned
them in the useful tabulations. So, that can become useful in my report study. (5) Interpretation of the data With use of analyzed data I managed to prepare my project report. But the analyzing of data would not help the study to reach towards its objectives. The interpretation of the data is required so that the others can understand the crux of the study in more simple way without any problem so I have added the chapter of analysis That would explain others to understand my study in simple way. (6) Project writing This is the last step in preparing the project report. The objective of the report writing was to report the findings of the study to the concerned authorities. Tools and Techniques As no study could be successfully completed without proper tools and techniques, same with my project. For the better presentation and right explanation I used tools of statistics and computer very frequently. And I am very thankful to all those tools for helping me a lot. Basic tools which I used for project from statistics are• Bar Charts • Pie charts
• Tables Bar charts and pie charts are really useful tools for every research to show the result in a well clear, ease and simple way. Because I used bar charts and pie charts in project for showing data in a systematic way, so it need not necessary for any observer to read all the theoretical detail, simple on seeing the charts anybody could know that what is being said. Applied Principles and concepts While I started to do the project the main thing which was the matter of concern was that around what principles I have to revolve my project. Because without having any hypothesis and objective we cannot determine that what output or result we are expecting from the project. And second thing is that having only tools and techniques for the purpose of project is not relevant until unless we have the principals for which we have to use those tools and techniques. Mathematical Averages Standard Deviation Correlation
Sources of primary and Secondary data:
For the purpose of project data is very much required which works as a food for process which will ultimately give output in the form of information. So before mentioning the source of data for the project I would like to mention the source of data for the project I would like to mention that what type of data I have collected for the purpose of project and what is exactly. 1. Primary Data: Primary data is basically the live data which I collected on field while doing cold calls with the customers and I shown them list of question for which I had required their responses. In some cases I got no response from their side and then on the basis of my previous experiences I filled those fields. Source: Main source of primary data for the project was Questionnaires which I got filled by the customers or sometimes filled myself on the basis of discussion with the customers.
Secondary data for the base of the project I collected from intranet of the Bank and from internet, RBI Bulletin, Journal by ICFAI University. Limitation of the study The limitations that left in my side are:
It was critical for me to gather the financial data of the every bank of the public sector Banks so the better evaluations of the performance of the banks are not possible. Since my study is based on the secondary data, the practical operations as related to the NPAs are adopted by the banks are not learned.
➢ Since the Indian banking sector is so wide so it was not possible for me to cover all the banks of the Indian banking sector. NON-PERFORMING ASSETS The world is going faster in terms of services and physical products. However it has been researched that physical products are available because of service industries. In the nation economy also service industry plays vital role in the boosting up of the economy. The nations like US, UK, and Japan have service industries more than 55%.The banking sector is one of appreciated service industry. The banking sector plays large role in channelizing money from one end to other end. It helps almost every person in utilizing the money at their best. The banking sector accepts the deposits of the people and provides fruitful return to people on the invested money. But for providing the better returns plus principle amounts to the clients; it becomes important for the bank to earn the main source of income for banks are the interest that they earn on the loans that have been disbursed general person, businessman, or any industry for development. Thus, we may find the input-output system in the banking sector. Banks first, accepts the deposits from the people and secondly they lend this money
to people who are in the need of it. By the way of channelizing money from one end to another end, Banks earn their profits. However, Indian banking sector has recently faced the serious problem of Non performing Assets. This problem has been emerged largely in Indian banking sector since three decade. Due to this problem many public sector Banks have been adversely affected to their performance and operations. In simple words Non Performing Assets problem is one where banks are not able to recollect their landed money from the clients or clients have been in such a condition that they are not in the position to provide the borrowed money to the banks. The problem of NPAs is danger to the banks because it destroys the healthy financial conditions of the them. The trust of the people would not be any more if the banks have the higher NPAs. So, the problem of NPAs must be tackled out in such a way that would not destroy the operational, financial conditions and would not affect the image of the banks, recently,RBI has taken number steps to reduce NPAS of the Indian banks. And it is also found that the many banks have shown positive figures in reducing NPAs as compared to the past years. MEANING OF NPAS An asset is classified as non –performing assets (NPAs) if the borrower does not pay dues in the form of principle and interest for a period of 180 days. However with effect from March 2004, default status would be given to a borrower if dues were not paid for 90 days. If any advance or credit facilities granted by bank to a borrower become nonperforming, then the bank will have to treat all the advances/credit facilities granted to that borrower as non-performing without having
any regard to the fact that there may still exist certain advances/credit facilities having performing status.
WHAT IS NPAs (NON PERFORMING ASSETS) Action for enforcement of security interest can be initiated only if the secured asset is classified as Nonperforming Assets means an assets or account of borrower, which has been classified by a bank or financial institutions as substandard doubtful or loss asset, in accordance with the directions or guidelines relating to asset classification issued by RBI.
An amount due under any credit facility is treated as “past due” when it has not been paid within 30 days from the due date. Due to the improvement in the payment and settlement systems, recovery climate, up gradation of technology in the banking system etc, it was decided to dispense with ‘past due’ concept, with effect from March 31, 2001. Accordingly, as from that date, a Non performing assets(NPA) shell be an advance where interest and/ or installment of principal remain overdue for a period of more than 180 days in respect of a Term loan, The account remains ‘out of order’ for a period of more than 180 days, in respect of an overdraft/cash credit(OD/OC) . The bill remains overdue for a period of more than 180 days in case of bills purchased and discounted.
Interest and/ or installment of principle remains overdue for two harvest seasons but for a period not exceeding two half years in case of an advance granted for agricultural purpose, and Any amount to be received remains overdue for a period of more than 180 days in respect of other accounts. With a view to moving towards international best practices and to ensure greater transparency, it has been decided to adopt the ’90 days overdue’ norm for identification of NPAs, form the year ending March 31, 2004 .Accordingly, with effect form March 31, 2004, a non- performing assets(NPA) shell be a loan or advance where; ➢ Interest and/or installment of principal remain overdue for a period of more than 90 days in respect of a Term Loan, The account be remains ‘out of order’ for a period of more than 90 days, in respect of an overdraft /cash credit (OD/OC), ➢ The bill remains overdue for a period of more than 90 days in case of bills purchased and discounted,
➢ Interest and/ or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years in case of an advance granted for agricultural purpose, and
Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts. CLASSIFICATION OF LOANS In India the bank loans are classified on the following basis. Performing Assets:
Loans where interest and /or principle are repayable regularly as term and conditions sanction letter. Non- Performing Assets: Any loan the interest and/or installment of the principle are overdue more than 90 days, the account becomes NPA. According to the securitization and reconstruction of financial assets and enforcement of security interest ordinance, 2002 “non- performing assets” (NPA) means “an assets or account of a borrower, which has been classified by a bank or financial institutions as substandard, doubtful or loss asset, in accordance with the directions or guidelines relating to asset classifications issued by the Reserve Bank” Internationally, income from non-performing assets is not recognized on accrual basis, but is taken into account as income only when it is actually received. It has been
Decided to adopt similar practice in our country also. Banks have been advised that they should not charge and take to income account the interest on all Nonperforming assets. An asset becomes non- performing for a bank when it ceases to generate income. INCOME RECOGNITION:
Nature of credit facility Term Loans
Basis for treating as NPA A term loan is to be treated as NPA if interest remains past due for a period of 4 quarters for the year ended 31-3-1993,3 quarters for the year ended 31-3-1995 and onwards.
Cash Credit & overdrafts
A cash credit or overdraft account should be treated as NPA if the account remains out or order for a period of four quarters during the years ended 31-3-1993, three quarters during the year ended 31-3-1994 and two quarters during the year ended 31-3-1995 and onwards. OR There are some credits but the credits are not enough to cover the interest debited the same period.
Bill purchased An account should be treated as NPA if the bill remains overdue and and Discounted unpaid for a period of four quarters during the year ended31st March, 1995 and onwards. Other Accounts Any other credit facility should be treated as NPA if any amount to be received in respect of that facility remains past due for a period of four quarters during the year ended 31st March 1993. Three quarters during the year ended 31st March 1994 and two quarters during the year ended 31st March 1995 and onwards.
CLASSIFICATION: S.N 1 Category of assets Standard Assets Basis for Deciding the category An asset, which does not disclose any problem and also does not carry more than normal risk attached to the business, it should not fail under the category o NPA. An asset, which has been identified as NPA for a period not exceeding two years. In the case of term loan, if the installments of principal are overdue for more than one year but not exceeding two years, it is to be treated as sub-standard asset. An asset, which remains NPA for
Sub- standard Assets
Assets 4 Loss Assets
more than two years. An asset where loss has been identified by the bank or internal/external auditors or by RBI inspection but the amount has not been written-off, wholly or parity.
Potential NPA:- Standard assets which disclose problem/irregularities beyond 45 days but less than 90 days. Provisioning Requirement as per Asset classification Banks are required to make provision against each of the NPA account. The minimum extent of provision to be made against Sub-standard, doubtful and loss is different and the same is indicated below:
Provision of o/s balance
Standard Agriculture&SME accounts Residential housing Loan beyond RS 20 lakh Loan and advances to capital market, personal loan, credit cards, commercial rate state &NBFCS Other Sub-Standard (Secured) Sub-Standard (Sanctioned originally as secured) Doubtful(Unsecured portion) Doubtful-1(Secured) Doubtful-2(Secured) Doubtful-3(Secured) Loss asset Notes on provisioning (1)
0.25% 1.00% 2.00%
10% 20% 100% 20% 30% 100% 100%
No provision should be made against non-founded exposures in case of NPA accounts. Treatment of back –ended subsidy/ recoveries etc against NPAs held in separate account- provision requirement would be calculated on the
“outstanding ledger balance less credit balance held in separate account.” Implication of NPA account (1) (2) (3) (4) NO interest income on NPA accounts. Provision on gross NPA accounts If one account of the borrower is NPA, his all account would be NPA. Reputation loss to bank.
REASONS FOR NPAs IN INDIA The following factors contribute to NPAs --Internal Factors • Diversion of funds for Expansion/ diversification/ modernization Taking up new projects Helping /promoting associate concerns time / cost overrun during the project implementation stage Business (Product, marketing, etc) failure Inefficiency in management Slackness in credit management and monitoring Inappropriate technology/ technical problems Lack of co-ordination among lenders
○ ○ ○
• • • • •
External factors • Recession • Input/ power shortage • Price escalation • Exchange rate fluctuations • Accidents and natural calamities, etc\ • Changes in government policies in excise /import duties ,pollution control orders, etc. • Liberalization of economy /removal of restrictions/ reduction of tariffs A large number of NPA borrowers were unable to compete in a competitive market in which lower prices and greater choices were available to consumers. Further, borrowers operating in specific industries have suffered due to political , fiscal and social compulsions, compounding pressure from liberalization (e.g., sugar and fertilizer industries) . • Over optimistic promoters Promoters were often optimistic in setting up large projects and in some cases were not fully above board in their intentions. Screnning procedures did not always highlight these issues. Often projects were set up with the expectations that part of the funding would be arranged from the capital markets, which were booming at the time of project appraisal. When the capital markets subsequently crashed, the requisite funds could never be raised, promoters often lost interest and lenders were left standard with incomplete /unavailable projects. • Funding mismatch
There are said to be many cases where loans granted for short terms were used fund long term transactions. • High cost of funds Interest rates as high as 20% were not uncommon. Coupled with falling demand, borrowers could not continue to service high cost debt. • Highly leveraged borrowers Some borrowers were under capitalized and over burdened with debt to absorb the changing economic situation in the country.
Non-legal Measures:Reminder system Seasonal/ Area based recovery drive Follow up of Potential NPA Review of NPA account Preparation of village wise /Area wise list Visit to Borrower’s business premise/Residence Allotment of NPA account to staff Recovery camps/Settlement camp Road shows
(1) (2) (3)
(7) (8) (9)
(11) (12) (13) (14) (15) (16)
(18) (19) (20) (21) (22) (23) (24)
Appointment of professional Recovery Agents. Rehabilitation of sick units Corporate debt Restructuring Lok adalat /lok nayalaya Circulation of list of defaulters Recalling of advances Recovery through Recovery Branches Up gradation of NPA Cash Recovery Recovery through compromise cases Revival of failed compromise cases Recovery of written-off cases Restructuring / Rescheduling Sale of financial Assets (Asset Reconstruction companies) Write-off Legal Measures (1) (2) (3) (4)
Recovery certificate (Tehsil office) Recovery through Judicial process (Filing of suit) Execution of decreed cases Debt Recovery Tribunals (DRT) Securitization and Reconstruction of Financial assets and Enforceability of
security interest Act 2002 (SARFAESI) Other legal measures
INDIAN ECONOMY AND NPAS undoubtedly the world economy has slowed down, recession is at its peak, globally stock markets have tumbled and business itself is getting hard to do. The Indian economy has been much affected due to high fiscal deficit, poor infrastructure facilities, sticky legal system, cutting of exposures to emerging market by FIIs, etc. Further, international rating agencies like, standard & poor have lowered India’s credit rating to sub-investment grade. Such negative aspects have often outweighed positive such as increasing forex reserve and a manageable inflation rate. Under such a situation, it goes without saying the banks are no exception and are bound to face the heat of global downturn. One would be surprised to know that the banks and financial institutions in India hold nonperforming assets worth Rs 1, 10,000 crore. Bankers have realized that unless the level of NPAs is reduced drastically, they will find it difficult to survive. The actual level of Non Performing Assets in India is around $ 40 billion much higher than government’s estimation of $ 16 billion. This difference is largely due to the discrepancy in accounting the NPAs followed by India and rest of the world. The Accounting norms of the India are less stringent that those of the developed economies. The Indian banks also have the tendency to extend the past dues. Considering the GDP of India nearly $470 billion the NPAs are 8% of the total GDP which Was
better than many Asian countries, the NPA of china was 45% of the GDP< while JAPAN had NPAs of 25% of the GDP and Malaysia had 42%. The aggregate level of the NPAs in Asia has increased from $1.5 billion in 2000 to $2 billion in 2002, looking to such overall picture of the market, we can say that India is performing well and the steps taken are looking favorable. NPA CHARACTERISTICS IN INDIA
Size of NPA Portfolios Reviewed On an overall, in comparison to the gross NPA portfolio of the financial sector in India for the year ended March 31,2003, approximately Rs 452 billion from the total gross NPAs of Indian banking sectors • • • • Public Sector Banks cover 55% of gross NPAs Private Sector banks cover 11% of gross NPAs Foreign Sector banks cover 3.02% and Financial Institutions cover 29%
Sect oral Segmentation Banks in India are required to reserve a part of their lending for the priority sector. Broadly this comprises the sub-sector such as Agriculture, Small scale Industries, and other activities such as small business, retail trade, small transport operators, professional and self employed persons, education loans, micro-credit etc. In addition, certain investments in bonds issued by state finance corporations
(SFCs), state Industrial Development corporations (SIDCs), etc are recognized as priority sector activities. As seen from the chart below, around 23% of the NPA portfolio is in the priority sector including agriculture, small scale and others. The balance 77% belongs to NPAs in the non-Priority sector which includes NPAs pertaining to public sector undertakings, corporate and retail borrowers. Within the –priority sector, a large proportion of NPAs (more than 96%) by gross value are in the corporate segment. The largest proportion among the corporate borrowers is private sector corporate borrowers. Since the sect oral segmentation norms are applicable to banks only the above graph is somewhat skewed (participant lenders included financial institutions). Given below is the sect oral segmentation in public sector banks only. Priority sector NPAs constitutes 46% of the NPA portfolio of Participant public sector banks by value. In the non-priority sector corporate borrowers from the largest portion of NPAS.
(3) INDUSTRY SEGMENTATION
Most of the participant lenders have provided us with detailed NPA profile for large NPAs.The remainder of our analysis for NPA profiling, therefore, focuses on the large NPA portfolio. The total large NPA (individual gross value above Rs 10 million) portfolio of the participating banks amounts to Rs 357 billion approximately. The top 5 industries with maximum large NPAs (by gross value) for the participant lenders included in the study are textiles, iron & steel, chemicals, Engineering and (non ferrous)Metals. The large NPAs of these industries alone comprise approximately half of the total large NPA portfolio (by gross value) of the participating lenders. At 15%, the textiles industry is the single largest contributor to the gross large NPAs of the participating lenders. It is followed by Iron& steel with 14% chemicals with 9%, Engineering with8% and Metals with 5%. The participant lenders provided loan grading segmentation of the large NPAs in the top 5 industries viz. textiles, iron steel, chemicals, engineering and metals. Only about 20% of the large NPA portfolio by gross value in sub-standard assets. This indicates that the rehabilitation potential of, about 80% of the large NPA portfolio in each of the top 5 industries is somewhat limited.
Nearly 68% of the gross NPAs by gross value are in the doubtful category. Within this, 28% by gross value are in the c3 subcategory. It might be worth nothing that c3 category comprises assets that have been non-performing for at least 5 years and that there is no upper time limit on holding assets in the c3 category if the lenders are able to provide evidence that collateral exists. Also nearly 15% to 18% of the large NPAs in each of the top industries (other than chemicals) are loss assets.
Ratio Analysis The relationship between the related items of financial statements is known as ratio. A ratio is just one number expressed in terms of another. The ratio is customarily expressed in three different ways. It may be expressed as a proportion between the two fig. second items is expressed in terms of percentage. Third, it may be expressed in terms of rates. The use of ratio has become increasingly popular during the last few years only. Originally, the bankers used the current
ratio to judge the capacity of the borrowing business enterprises to repay the loan and make regular interest payments.
Gross NPA ratio:-Gross NPA ratio of gross NPA to gross advances of the bank. Gross NPA is the sum of all loan assets that are classified as NPA as per RBI guidelines .The ratio is to be counted in terms of percentage and formula for GNPA is as follows:Gross NPA Gross NPA ratio = ---------------------- * Gross advances
S.No Name of bank Gross NPA to Gross advances 2001 1 2 3
2002 16.94 5.26 12.39
2003 13.65 4.89 11.02
Allahabad bank Andhra bank Bank of
17.66 6.13 14.11
Baroda 4 5 6 7 8 9 10 11 12 13 14 15 16 17
PNB IOB Indian bank CB of India Corporation Bank Dena bank Syndicate bank
18.45 11.81 21.76 16.05 5.40 25.34 7.84
18.19 11.35 17.89 14.70 5.19 24.11 8.35 18.32 18.32 9.36 11.95 9.59 8.35 17.89
19.25 10.29 12.39 13.06 5.27 17.56 8.12 16.36 12.35 6.16 9.34 8.24 8.12 12.35
Union bank of 21.84 India United bank of India Vijay a Bank SBI Uco bank Syndicate bank Indian bank 21.84 10.0 12.93 11.64 7.87 21.76
18 19 20
Canara bank Bank of India Bank of Maharashtra
7.48 10.25 12.35
6.22 9.37 10.95
5.96 8.15 10.43
The table above indicates the quality of credit portfolio of the banks. High gross NPA ratio indicates the low credit portfolio of banks and viceversa. We can see from the above table the PNB and Sind Bank has the higher gross NPA ratio of 19.25% followed by Dena Bank with 17.86%.
Net NPA ratio: --- The net NPA percentage is the ratio of net NPA to net advances in which the provision is to be deducted from the gross advances. The provision is to be made for NPA account. The formula for that is
Gross NPA-Provision NPA ratio= ------------------------------ * 100 Gross advances- Provision S.NO Name of Net NPA+Net
advances 2001 2002 11.09 2.45 4.79 6.02 5.81 3.89 7..98 2.31 16.37 6.32 3.2 5.32 5.63 2003 7.08 1.79 3.72 5.59 4.02 5.59 6.74 1.65 11.88 5.23 1.4 3.86 4.5
1 2 3 4 5 6 7 8 9 10 11 12 13
Allahabad Bank Andhra Bank Bank of Baroda
11.23 2.95 6.77
Bank of India 6.72 Bank of Maharashtra Canara Bank CBI Corporation Bank Dena Bank IOB OBC PNB SBI 7.41 4.84 9.72 1.98 18.37 7.01 3.60 6.74 6.03
Uco Bank Punjab and Sind Bank
The ratio indicates the degree of risk in the portfolio of the Banks. High NPA ratio indicates the high quality of risky assets in the banks for which no provision is to be made. From the table it becomes that the clear NPA ratio of almost all Banks have been improved quite well as compared to the provision year.
Provision Ratio-: Provision ratio are to be made for to keep safety against the NPA & directly affected on the gross profit of the bank to gross of the banks. The formula is that:Total Provision Provision ratio= ------------------------- * 100 Gross NPAs Problem Asset Ratio: - It is the ratio of gross NPA to total asset of the banks. The formula for that is:Gross NPAs Problem Asset Ratio= ---------------------*100
Total Assets S.NO Name of Bank Problem Asset Ratio 2201 1 2 3 4 5 6 7 8 9 Allahabad Bank Andhra Bank BOB BOI BOM Canara Bank Dena Bank PNB SBI .082576 .023056 .066102 .05765 .046022 .024602 .107672 .059473 .025513 2002 .080836 .025034 .06331 .053319 .042217 .022329 .105934 .056773 .04447 2003 .065648 .023531 .054499 .044643 .038422 .025021 .08018 .046072 .035932
It has been direct bearing on return on asset as well as liquidity risk management of the bank. High
problem asset ratio, which means high liquid from the above table it, becomes clear. Dena bank have high ratio of 8.0% that’s ratio implies that the Banks have liquid asset through which they will be able to repay their liabilities of deposits quickly as compared to other banks.
Capital Adequacy Ratio:- It can be defined as ratio of the capital of the banks to its assets which are weighted/ adjusted accounting to risk attached to them I.e. Capital Capital Adequacy Ratio = ---------------------*100 Risk weighted assets
As per prudent Norms Banks were required to achieve 8% CAR, increased to 9% by march 2000. For the purpose of capital adequacy Achievement the capital base I.e. Tire1+ Tire2 should not be less than the prescribed % of total risk weighted assets of the Bank. S.NO Name of Bank Capital adequacy Ratio 2001
1 2 3 4 5 6 7 8 9 10
Allahabad Bank Andhra Bank Bank of Baroda Canara Bank CBI Uco Bank PNB SBI Indian Bank Corporation Bank
10.5 13.4 12.8 9.84 10.02 9.05 11.42 12.79 -12.77 13.43
10.62 12.59 11.32 11.88 9.58 9.64 10.70 13.35 1.70 15.65
11.5 13.62 12.65 12.50 10.51 10.04 10.43 13.50 10.85 18.50
The capital adequacy Ratio is important for the maintain as per the Banking regulations, As far as this ratio is concerned the corporation bank has shown much appreciated result by acquiring the ratio of 18.50% followed by the united bank of India. But one remarkable performance done by the Indian bank which had CAR is negative is -12.77% in 2001 but improved its performance in 2003 by acquiring CAR 10.85%.
Tire 1:- Paid up capital, statutory Reserve, Revenue capital reserves and other undisclosed reserve less accumulated other intangible assets. Tire2:- Property Revaluation Discounted by 55%, subordinate fluctuations Reserve, provisions on standard assets & Capital should not exceed Tire-1
Sub- standard Assets Ratio:-It is the ratio of total substandard Assets to gross NPA of the Bank. Sub-standard Asset Ratio Total Sub-Standard Asset = ……………………………..*100 Gross NPA
The ratio calculated below is for the entire public Sector Banks:(RS IN CRORE) Year Substandard Assets
Calculations of ratio 2001 26.96% 2002 27.95% 2003 27.56%
It indicates Scope of up gradation/ improvement of NPA. Higher Sub-Standard Asset ratio means that in whole NPA the Sub-Standard Ratio has major proportion which indicates that there is a higher scope of advances up gradation or improvement because it will be very easy to recover the loan as minimum duration.
Doubtful Asset Ratio:- It is the ratio of total doubtful Assets to gross NPAs of the bank. Total doubtful assets Doubtful Asset Ratio = -------------------------*100 Gross NPAs Year 2001 2002 2003
Doubtful Asset Gross NPAs
The ratio calculated below are for the entire public sector banks:Year 2001 61.24% 2002 59.59% 2003 59.79
It indicates the scope of compromise for Npa reduction .Above table shows the doubtful asset ratio of PSB, which is quite that the banks will have to go through compromise measure for increasingly number of times as its Sub- Standard Ratio has decreased in recent years.
Loss Asset Ratio: - It is the ratio of total loss asset to Gross NPA of the bank. Total Loss Assets Loss Asset Ratio= -------------------------- * 100 Gross NPA
Loss Asset Gross NPAs
The ratio below entire public sector banks are:Year 2001 2002 2003 11.96% 12.50% 12.65%
It indicates the proportion of bad loans in the bank. Above table shows loss Asset Ratio, which indicates that the banks have maintained lower Asset Ratio, which indicates that the bank has lower bad loans. The bank must take necessary steps to control this ratio, as it’s the indication that there in necessary steps to control this ratio, as it’s the securities loan Accounts in the bank. Recommendations for reducing NPAs
Effective and regular follow-up of the end use of the funds sanctioned is required to ascertain any embezzlement or diversion of funds A healthy Bankers- Borrower relationship should be developed. Many instances have
been reported about forceful recovery by the banks, which is against corporate ethics. Debt recovery will be much easier in a congenial environment. Assisting the borrowers in developing his entrepreneurial skills will not only establish a good relationship between borrowers but also help the bankers to keep a track of their funds. Some tax incentive like capital gain tax exemption ,carry forward the losses to set off the same with other income of the qualified Institutions Borrowers (QIBs) should be granted so as to ensure their active participation by way of investing sizeable amount in distressed assets of banks and financial institutions. So far the Public Sector Banks have done well as far as lending to the priority sector is concerned. However, it is not enough to make lending to this sector mandatory, it must be profitable by sharply reducing the transactions costs. This entails faster embracing of technology and minimizing documentation.
Commercial Banks should be allowed to come up their own measures to address the problem of NPAs. This may include waiving and reducing the principal and interest on such loans, or extending the loans, or settling the loan accounts. They should be fully authorized and they should be able to apply all the preferential policies granted to the asset management companies.
Chapter 4:- Conclusions and Recommendations
Conclusion to the problem A report is not said to be completed unless and until the conclusion is given to the reports. A conclusion reveals the explanations about what the report has covered and what is the essence of the study. What my project report cover is concluded below. The problem on which I focused my study is NPAs the big challenge before the public sector banks .The Indian Banking sector is the important service sector that helps the people of the India to achieve the socio economic objective. The Indian banking sector is developing with good appreciate as
compared to the global benchmark banks. The Indian banking system is classified into schedule and non schedule banks. The public sector banks play very important role in developing the nation in terms of providing good financial service. The public sector banks have also shown good performance in the last few years. The only problem is that the public sector banks are facing today is the problem of nonperforming assets. The non performing assets means those assets which are classified as bad assets which are not possibly by return back to the banks by the borrowers. If the proper management of the NPAs is not undertaken it would be hampers the business of the banks. The NPAs would as try the current profit, interest income due to large provisions of the NPAs and would affect the smooth functioning of the recycling of the funds. If we analyze the past years data, we may come to know that the NPAs have increased very drastically after 2001, in 1997 the gross NPAs of the Indian banking sector was47,300 crore where as in 2001 the fig was63,883 and which increase at faster rate in 2003 with 94,905 crore. The public sector banks involve its nearly 50% of share in the NPAs .The RBI has been trying to take number of measures but the ratio of NPAs is not decreasing of the banks. The banks must find out the measures to reduce the evolving problem of the NPAs. If the concept of NPAs is taken very lightly it would be dangerous for the Indian banking sector. The reduction of the NPAs would help the banks to boost up their profits, smooth recycling of funds in the nation. This would help the nation to develop more banking branches and developing the economy by providing the better financial services to the nation Allahabad Bank has set a target to bring down its net nonperforming asset (NPA) to below 1% by the end of current fiscal and expects its balance sheet size to double during the next two-three years if it managed to maintain the existing growth rate of 30-35%.
The bank is also planning to put in place the centralized banking solution (CBS) by December this year. According to ON Singh, chairman and managing director, Allahabad Bank: “We are going to be one of the best in the industry in terms of NPA management. We are targeting gross NPA of 5% and net npa of less than 1% by March, 2005.” Incidentally, the net NPA of the bank has already come down to 1.7% or Rs 299.8 crore as in September from a high of 5.2% or Rs 683.4 crore as in September, 2003. Mr. Singh said the bank was focusing on NPA provision coverage, the ratio of which went up to 76.6% as in September from 73.8% as in March and 60% as in September, 2003. The bank has already crossed the Rs 55,000 crore business mark at Rs 55,330 crore during the second quarter of the current financial year and is confident of crossing Rs 61,000 crore marks by the end of the fiscal. In March 2008 gross npa declined to 1.8% from 2.00% .
Through RBI has introduced number of measures to reduce the problem of increasing NPAS of the bank such as CDR mechanism. One time settlement schemes, enacted of SRFAESI ACT etc. A lot of measures desired in terms of effectiveness of these measures. What I should suggest for introducing. The evolutions of the NPAs of public sector banks as under:-• Each bank should have its own independence credit rating agency which should evaluate the financial capacity of the borrower before than credit facility.
• The credit rating agencies should regularly evaluate the financial condition of the clients. • Special accounts should be made of the clients where monthly loan concentration report should be made. • It is also wise for the banks to carry out special investigation audit of all financial and business truncations and books account of the borrower company when there is possibility of the diversion on the funds and mismanagement. • .Bank should evaluate the swot analysis of the borrower companies.ie 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 operation performance. • There should be proper monitoring of the restructuring accounts because there is every possibility os the loan slipping into NPAs category again. • Proper training is important to the staff of the banks at the appropriate level either ongoing process. That hoe they should deal the problem of NPAs and what continues steps should take to reduce the NPAs. • Willful default of bank loans should be made a criminal offence. • No loan is to be given to a group whose one or the other undertaking became a defaulter. • There should be proper monitoring of the restructured accounts because there is every possibility of the loans slipping into NPAs category again. • Independent settlement procedure should be more strict and faster and the decision made by the settlement committee should be binding both borrowers and lenders and any one of them failing to follow the decision of the settlement committee should be punished severely.
NAME ……………………………………………. AGE ………………………… SEX: MALE/ FEMALE ADDRESS ……………………………………………….. …………………………………………………………… CITY ………………….. CONTACT NO ……………………
1. Do you know about Allahabad Bank ? Yes NO 1. Allahabad bank is a – Private Bank Public Bank Other 1. What is the current NPA of Allahabad Bank? 1.7% 3.7% 1. What are the steps taken by Allahabad Bank to reduce NPA? 2. Name the Bank which comes in your mind at very first AND why? 3. Do you think Allahabad bank is a safe place for your money? Yes No 1. Your level of satisfaction with Allahabad Bank--2. If you will have option against Allahabad Bank you will go for SBI PNB
Other 1. What is the current EPS of Allahabad Bank?
What are the total branches of Allahabad Bank?
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