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Non-performing Assets In Cooperative Banks

(Hardcover - 2006)
K. Ravichandran
R. Mayilsamy
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Publisher: Abhijeet Publications

Book: Non-performing Assets In Cooperative Banks

Non Performing Assets (NPAs), as a syndrome, though not new to the Cooperative Banking
Structure has been causing trouble and confusion during the recent past. Because NPAs as the
percentage to total recoverable funds acts as a constraint on the efficiency of the lending
institution and their capacity to borrow funds and lend to agriculture. At all India level, the
total loan issued by DCCBs during the year 1950-51 was Rs. 83 crores. This has increased
over the years and stood at Rs. 81025 crores during the year 2005-06. Though the quantum
of loans increased over the year, the syndrome of cooperative credit i.e., the overdues have
been deeply rooted into the system and block the flow of credit to agriculture. Shri Balasaheb
Vikhe Patil, rightly said, "for any credit system to sustain its operations on a viable basis, it is
necessary to enforce strong credit discipline among its clients. The Cooperatives need to tackle
the problem of low recoveries. They have to draw lessons from their counterparts elsewhere
who are able to show consistently high recovery performance" (NABARD: 2000; p. 137).
Inordinate delay in recovery of loan builds up NPAs, which affect the health of Cooperative
Banks. The Committee on Banking Sector Reforms reported that funds blocked in NPAs
increase the cost of financial inter-mediation as banks resort to rasing deposits and borrowings
at a higher cost as a measure to minimize the balance between the cash outflow and cash
inflow arising out of the NPAs and the money locked up NPAs are not available for productive
uses and to the extent that banks seek to make provisions for NPAs. This has an adverse
impact on the profitability of the banks both in short and long run. So, Reserve Bank of India
(1999) in its report on NPAs stated that reduction in NPAs should be treated as a national
priority. As the concept of NPA is of recent origin, only few books are available to study the
level of NPAs in banking sector. I hope that the present book will satisfy the academic needs of
students and researchers in banking in general and cooperative banking in particular.
About Author :
Dr. K. Ravichandran (b. 1965) got his education at TBML College, Porayar, Tamilnadu. He has a
distinguished academic career. He had been a Faculty Member at the Institute of Cooperative
Management, Kannur, Kerala. Presently, He is working as Reader/Coordinator, Diploma
Insurance Business, Department of Cooperation, Gandhigram Rural University, Gandhigram,
Dindigul, Tamilnadu. He has published many papers in the field of banking and management in
the reputed journals. His other works are: Crop Loan System and Overdue, Marketing
Research, New World through Cooperatives, Functional Management and Rural Credit Markets.
He is also trainer and developed training modules in the field of Cooperation. Mr. R. Mayilsamy
(b. 1977) got his education at Gandhigram Rural University, Gandhigram, Dindigul, Tamilnadu.
He was awarded Fellowship from Jawaharlal Nehru Memorial Fund, New Delhi for his Ph.D.
programme. He has participated and presented many research papers at the State, National
and International seminars conducted by various academic Institutions. At present, he is
working as a Lecturer (SF), Department of Cooperation, Sri Ramakrishna Mission Vidyalaya
College of Arts and Science, Coimbatore, Tamilnadu.
Contents :
Preface Abbreviations Used Non Performing Assets in Short term Cooperative Credit Structure-
A Conceptual Framework District Central Cooperative Banks and Non Performing Assets in
India Non Performing Assets in District Central Cooperative Banks in Tamil Nadu Non-
Performing Assets in Dharmapuri District Central Cooperative Bank Bibliography Annexures