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Sagar Report123
Sagar Report123
Guide:
Submitted by:
Roll
Batch (2014-2016)
Project Synopsis
1. Title of the Project: A COMPARATIVE STUDY ON NPA OF SELECTED BANKS
IN INDIA
2. Problem under Study
In simple words, as long as the expected income is realized from the asset, it is treated as
performing asset but when it fails to generate income or deliver value on due date it is
treated as non-performing asset. Banks have been advised by the RBI that they should
identify the non-performing assets and ensure that interest on such assets is not
recognized as income and taken to the profit and loss account. Banks are to recognize
their income on accrual basis in respect of income on performing assets and on cash basis
in respect of income on non-performing assets. Any interest accrued and credited to
income account must be cancelled by a reserve entry once the credit facility comes under
the category of non-performing assets.
The incidence of non-performing assets (NPAs) is affecting the performance of the credit
institutions both financially and psychologically. Non-performing asset (NPA) is not only
non-performing but also makes the banker and the bank non-performing as it Prevents or
delays recycling of funds, denies income from the asset by way of interest and Erodes
profit by way of provisions.
2.1 Categories of NPAs
2.12 Substandard Assets