Rohan Finance Project

A
PROJECT REPORT ON
“A STUDY OF NON PERFORMING ASSET OF SOLAPUR JANTA SAHAKARI

BANK LTD. SOLAPUR ”
SUBMITTED TO
BHARATI VIDYAPEETH UNIVERSITY, PUNE.
IN PARTIAL FULFILLMENT FOR THE DEGREE OF
BACHELOR OF BUSINESS ADMINSTRATION
SUBMITTED BY
MR. ROHAN R MENDAKE
UNDER THE GUIDANCE OF
PROF . P Borgaonkar
THROUGH THE DIRECTOR
BHARATI VIDYAPEETH
ABHIJIT KADAM INSTITUTE OF MANAGEMENTAND SOCIAL SCIENCES,

SOLAPUR.(2019-2020)
DIRECTOR CERTIFICATE
This is to certify that the project entitled “A STUDY OF NON PERFORMING ASSET
OF SOLAPUR JANATA SAHAKARI BANK JULE SOLAPUR BRANCH, DIST
SOLAPUR prepared by MR. ROHAN R MENDAKE. in partial fulfillment for the
degree of BACHELOR OF BUSINESS ADMINSTRATION is carried out under the
supervision and guidance of PROF.P BORGAONKAR sir and the same is forwarded to
the university.
I also wish him all the best for his career and success to every step he moves in life.
Place: - SOLAPUR
Date: -
(DIRECTOR)
DR. V.S.MAGNALE
(M.A M.Phil. Ph.D)

MBA 2nd 2019-2020 NON PERFORMING ASSET
GUIDE CERTIFICATE
This is to certify that MR. ROHAN R MENDAKE has satisfactorily

completed the project work entitled “A STUDY OF NON PERFORMING
ASSET ON SOLAPUR JANATA SAHAKARI BANK JULE SOLAPUR, DIST
SOLAPUR in partial fulfillment for the degree of BACHELOR OF BUSINESS
ADMINSTRATION submitted to BHARATI VIDYAPEETH UNIVERSITY, PUNE
during the academic year 2019-20 under my guidance.
To the best of my knowledge and belief the matter presented by him is original and not copied
from any source. Also this report has not been submitted earlier for the award of any degree or
diploma of Bharati Vidyapeeth Deemed University, Pune or any other University.
Place:- SOLAPUR
Date: -
(GUIDE)
PROF.P BORGAONKAR
(M.Com,)
B.V.U.,A.K.I.M.S.S.,SOLAPUR Page 3
MBA 2ND 2019-2020 NON PERFORMING ASSET
DECLARATION
I hereby declare that the project report entitled “A STUDY OF NON

PERFORMING ASSET ON SOLAPUR JANATA SAHAKARI BANK JULE
SOLAPUR, DIST SOLAPUR is an original work prepared by me under the guidance of
PROF.P BORGAONKAR. The empirical findings in this report are based on the data
collected during the project work. The matter included in this report is true & verified. This
report has not been presented anywhere else for the award of any degree course.
I understand that any such copying found then, I shall be liable to be punished as the
authorities deem fit.
Place: SOLAPUR
Date:
Mr.ROHAN RAJSHEKHAR MENDAKE
ACKNOWLEDGEMENT
This study is an attempt STUDY OF THE NON PERFORMING ASSETS

OF SOLAPUR JANATA SAHAKARI BANK Ltd. SOLAPUR. I owe my deep sense of
gratitude for this successful completion of this project was made possible through co-
operation of many people. I am deeply conscious of the fact that study would have not been
possible without willing co-operation of PHADAKE MADAM (Branch Manager) by giving
permission for collecting the data.
I also extend thanks to my project Guide Prof. P BORGAONKAR for him valuable
guidance.
Place: Solapur
Date
Mr. ROHAN R MENDAKE
INDEX
Sr. No. Particulars Page No.
CHAPTER – I
01 INTODUCTION OF THE STUDY 07 to 10
CHAPTER – II
02 COMPANY PROFILE 11 to 16
CHAPTER – III
03 THOERTICAL BACKGROUND 17 to 25
CHAPTER – IV
04 DATA ANALYSIS AND 26 to 39
INTERPRETATION
CHAPTER – V
05 OBSERVATIONS AND FINDINGS 40 to 41
CHAPTER – VI
06 CONCLUSION AND SUGGESTIONS 41 to 41
CHAPTER – I
INTRODUCTION
INTRODUCTION OF THE STUDY:
Importance of the non performing assets has become more and more since the
formation of Shri M. Narshimhan committee on banking sector reform in 1991. We can say
that it is a second Landmark in banking sector in India after nationalization of banks. After
nationalization of banks it has been given much attention on the lending policy of nationalized
banks but not much attention has given to the recovery of advances of nationalized banks by
Reserve Bank of India (RBI).
Recovery of non-performing assets has become critical performance area for all banks
in India. As per RBI report, March 1999, gross NPA of all the scheduled commercial banks
and primary co- operative banks have gone up to Rs. 58,554 crores (14.6%) and to Rs. 4535
(12.2%) crores respectively. Reserve Bank of India (RBI) introduced a new set of prudential
norms in April, 1992 for commercial banks and subsequently it has been extended, in stages
to urban co-operative banks . As per the recommendations of high power committee on urban
co-operative banks constituted in May 1999 under the chairmanship of K Madharao as a need
for strengthening the co-operative sector in order to enhance operational efficiency,
productivity and profitability and with the objective of implementing international best
practices in Indian banks, it is compulsory for all banking institutions to comply with
prudential norms of RBI.
1.1 OBJECTIVE:-
Primary Objective:-
 The primary objective of the making report is to know why NPA is the great
challenge to the co-operative bank.
 To study comperative position of NPA and provisioning of the bank
Secondary Objectives:-
The secondary objectives of preparing this report are;
 To understand what is Non performing Asset and what are the underlying reasons
for the emergency of the NPA.
 To understand the impact of NPA on the operations of the co-operative bank.
1.2 SCOPE:-
The present study undertaken by the researcher will be focused on certain specified
functional areas within the regular limits and will be restricted with financial policies &
practices (NPA) in Solapur Janata Sahakari Bank.
1.3 LIMITATIONS:-
 The study is limited Solapur Janata Sahakari Bank Ltd.Jule Solapur Branch.
 The information provided by Branch Manager & respondents is considered authentic.
 The time span was very short for the study.
 This study is based on primary and secondary data received from bank therefore
all limitations of primary and secondary data are limitations for the study.
1.4 RESEARCH METHODOLOGY:-
Methods of data collection:-

Types of data:-
Normally two types of data are used for the purpose of carrying out research.
1) Primary Data
2) Secondary Data
 Primary Data:-
Primary Data is the one which is collected from fresh sources and for the first time
while carrying out the research.
Through discussion with the managers concerned I got a lot of information about the process
of NPA. Due to these discussion I could get the knowledge of how the whole process is
carried on and the documents that have to be maintained for carrying on the NPA.
 Secondary Data:-
Internal sources of secondary data includes the data generated within the organization
i.e. Balance Sheet, Profit and loss account, Annul Reports.,etc
External sources are the sources outside the organization. eg. Internet, Books.,etc
CHAPTER – II
COMPANY PROFILE
2.1 Introduction To Organization:-
Name : Solapur Janata Sahakari Bank Ltd. Solapur

Location : Jule Solapur.
Establishment : 23 /04 / 2010

Constitution : Maharashtra State Co-operative Society Act.
Working Hrs. : 9:30 AM to12:30 AM & 5:00 PM to 7:00 PM
Phone Number : 0217 – 2741136/37
2.2 INTRODUCTION
Co-operative bank came into existence in the year1960. Co-operation is a word which
is derived from Latin word "Co-operari" 'co' means together and 'operari' means working
other is the meaning of co-operation for the prosperity of everybody. One for all and all for
one is the hidden fact of success behind this co-operation.
Though co-operative movement was started, in 1844 in India it started from 1994
with unlimited responsibilities.
In 1918 this act was undertaken by state government and in the year 1925 Mumbai
government passed independent co-operative act.
2.3 HISTROY & GROWTH OF THE ORGANIZATION
“SOLAPUR JANATA SAHAKARI BANK” is the well known and reputed bank in the
Solapur situated in the heart of Solapur city “SOLAPUR JANATA SAHAKARI BANK”
rd
started in the year 1966 i.e. on dated23 April 1966.The bank is registered under RBI Act as
SUR/BNK 119/Date 23/4/1966 RBI License No. M.H:- 459P/Date 19/4/1986.
“SOLAPUR JANATA SAHAKARI BANK” started with the blessing of god Siddheshwar
st
and the honest member and promoter/founder late Dr. P. G. Valsangkar. The 1 chairman of
st
Janata Sahakari Bank was Late Dhundiraj Shastri and 1 CEO was Late U.M. Kulkarni.
According to the bank balance sheet banks profit is increasing every year due to increasing
deposits loan recovery etc. which is shown in the following figures
It is noticed that the profit of the bank is increasing every year due to the investment of
customers the bank
2.4 Bank provides the special facilities to customer are as follows
• Bank provides loans and advances to the needy people, businessman, industrialist and
merchants.
• Education loans are provided for the students of B.E, B. Tech, MBA, MCA, etc.
• Housing finance is provided.
• Money transfers (DD/MT/TT)
• RTGS/NEFT (electronic transfer)
• Gold loans are also provided
• Safe deposited, lockers, ATM.
2.5 AREA OF OPERATION
Solapur Janata Sahakari Bank Ltd. Is Located in 7 district of Maharashtra i.e.Solapur,

Osmanabad, Latur, Mumbai, Pune, Nanded and Beed etc.
The Solapur city and all other branch is main operating area of NaviPeth Branch.
ORGANIZATION STRUCTURE
Chairman
Board of Director
Managing Director
Zonal Manager
Chief Assistant
General Manager
Chief Executive Officer
Senior Officer
Junior officer
Senior clerk
Junior Clerk
2.6 ACHIEVEMENTS
The bank achieved the special place i.e. scheduled bank in year 2002 in the sector of banking.
They also achieved their main target 1550 core in 2014.
2.7 MISSION
Opening branches in various parts of the city. The target of the bank
March 2013 - 1400 cores
March 2014 - 1700 corers
March 2015 – 2000 corers
In 2018 – 2500 corers is deposit and 700 corer is loan
CHAPTER – III
THEORATICAL BACKGROUND
3.1 CONCEPT & DEFINITION :
An asset, including a leased asset, becomes non-performing when it ceases to generate

income for the bank. A Non-Performing Asset (NPA) is a loan or an advance where :
i) Interest and/or installment of principal remain overdue for a period of more than
90 days in respect of a term loan.
ii) The account remains „out of order‟ in respect of an Overdraft/Cash Credit

(OD/CC), the bill remains overdue for a period of more then 90 days in the case of
bills purchased and discounted.
iii) The installment of principal or interest thereon remains overdue for two crop
seasons for short duration crops.
iv) The installment of principal or interest thereon remains overdue for one crop
seasons for long duration crops.
v) The amount of liquidity facility remains outstanding for more than 90 days, in
respect of a securitization transaction undertaken in terms of guidelines on
securitization dated February 1, 2006.
vi) In respect of derivative transactions, the overdue receivables representing positive

mark-to-market value of a derivative contract, if these remain unpaid for a period
of 90 days from the specified due date for payment.
vii) In case of interest payments, banks should, classify an account as NPA only if the
interest due and charged during any quarter is not serviced fully within 90 days
from the end of the quarter.
3.2 BASIC TYPES OF NPA
Sub-Standard Assets :
Earlier a sub-standard asset was one, which was classified as NPA for a period not
exceeding two years. With effect from 31 March 2001, a sub-standard asset was one, which
has remained NPA for a period less than or equal to 18 months. With effect from 31 March
2005 the norms have been further tightened and a sub-standard asset would be one, which has
remained NPA for a period less than or equal to 12 months.
In such cases, the current net worth of the borrower/guarantor or the current market
value of the security charged is not enough to ensure recovery of the dues to the banks in full.
In other words, such an asset will have well defined credit weaknesses that jeopardise the
liquidation of the debt and are characterised by the distinct possibility that the banks will
sustain some loss, if deficiencies are not corrected.
Doubtful Assets :
Earlier a doubtful asset was one, which remained NPA for a period exceeding two
years. With effect from 31 March 2001, an asset is to be classified as doubtful, if it had
remained NPA for a period exceeding 18 months. With effect from March 31, 2005, the
norms have been further tightened, and an asset would be classified as doubtful if it remained
in the sub-standard category for 12 months.
A loan classified as doubtful has all the weaknesses inherent in assets that were
classified as sub-standard, with the added characteristic that the weaknesses make collection
or liquidation in full, on the basis of currently known facts, conditions and values – highly
questionable and improbable.
Loss Assets :
A loss asset is one where loss has been identified by the bank or internal or external
auditors or the RBI inspection but the amount has not been written off wholly. In other words,
such an asset is considered uncollectible and of such little value that its continuance as a
bankable asset is not warranted although there may be some salvage or recovery value.
However, only those advances are classified as loss assets where no security is
available. In accounts where some security / ECGC / DICGC cover is available, these
accounts are not reported under loss assets.
3.3 CAUSES OF NPA
NPA arises due to a number of factors or causes like :-
 Speculation : Investing in high risk assets to earn high income.
 Default : Willful default by the borrowers.
 Fraudulent practices : Fraudulent Practices like advancing loans to ineligible

persons, advances without security or references, etc.
 Diversion of funds : Most of the funds are diverted for unnecessary expansion and
diversion of business.
 Internal reasons : Many internal reasons like inefficient management, inappropriate

technology, labour problems, marketing failure, etc. resulting in poor performance of
the companies.
 External reasons : External reasons like a recession in the economy, infrastructural

problems, price rise, delay in release of sanctioned limits by banks, delays in
settlements of payments by government, natural calamities, etc.
3.4 BENEFITS
 Better and speedier realization from Non-Performing Assets : Provides a

meeting ground to the lenders, borrowers and the prospective investors to speedily
address the issue of Non Performing Assets.
 Transparency and Visibility of Information on NPA : The portal will carry

vital information about NPAs providing easy and transparent access to the prospective
buyers who can then evince their interest in such Non Performing Assets.
 Better efficiencies in the management of NPAs : While traditionally we used

to avail the services of news media to create awareness about the Non Performing
Asset, NPA source.com brings into play the unlimited power of technology for the
lender to undergo due-dilligence.
 Robust data collection for use by all lenders across the country : Even
lenders will find it very easy to upload data on the website and take huge advantage of
the portal to release the value of their non performing assets easily and effectively.
 Attracting prospective investors / buyers from across the globe :

Geographical boundaries will not restrict the resolving of NPAs. Individuals from
across the world will be able to access the portal and avail the benefits.
 List of the NPA and their assets at a single location enabling lenders to
take informed decision : With maximum information available related to NPA,
the prospective investor can take informed decision towards the NPA.
 Revival of a sick unit / industry by infusing required capital through

prospective investors : The portal will help greatly in unlocking huge values and
once again bringing into action the units long lying sick.
 Help from facilitators : Investors, borrowers and lenders can take the service of
facilitators such as Legal Advisors, Financial Advisors, Tax Advisors, Project
Consultants & Valuation Experts through the portal.
3.5 CONCEPT OF NON-PERFORMING ASSET
Based on Narasimham committee recommendations RBI has implemented prudential

norms for improving the financial health of commercial bank and the quality of their loan
portfolio. The prudential norms asset classification, income recognition and provisioning have
st
come into effect from the accounting year ended 31 March 1999. These norms have been
implemented in a phased manner and have stabilized from the year 1994-95.
RBI has issued several circulars regarding these norms applicable to banks. Some of
the earlier guidelines have been modified and improved upon by revised guidelines taking
into consideration the representations received from the banks. Most of the area where there
was scope for the different / differing interpretations has now been classified.
Due to the implementations of the prudential the “accrual concept” has been changed
into “recoverability concept” in recognizing the income on non-performing asset. Also a
uniform practice has been adopted in respect of provision to be made on “Non-performing
Asset” (NPA).
3.6 NON-PERFORMING ASSET (NPA) :
„A judgment that is made by banks when haven‟t received a payment on one of their
bank loans within the last 90 days. However, each financial institution has its own criteria for
judging when as asset is Non-Performing‟.
An asset which ceases to generate income for the bank is called Non-Performing
assets. When a borrower could not pay interest and or installment on a loan, which remain
overdue for more than 180 days then it becomes non-performing. The basic factor to
determine whether an account is NPA or not is the record for recovery and not the availability
st
of security. The period of non-performing of 180 days has reduced to 90 days w.e.f. 31
March 2004.
According to the normal principles of accounting, balance sheet and Profit & Loss
accounts prepared for any year take into account any income or expenses which relate to that
year, whether or not the income has actually been received or expenditure has been actually
incurred. Thus these statement are being prepared on an accrual basis. In the case banks,
Section 65 (Rule 49) of the provides that income due to the “Overdue Interest Suspense
Account”, if it has not been actually received by the end of accounting year by debiting
identical amount to the Profit & Loss Account.
3.6 A Gross NPA and Net NPA :
As per RBI circular, gross advance means all outstanding loans and advances
including advance for which refinance has been received but excluding re-discount bills and
advance written off at Head-Office Level (Technical write off). The gross NPA and Net NPA
are always expressed as a percentage of advances the account where the bank is following the
account practice of debiting interest to customer‟s account and creating interest suspense
account. The following are deducted from gross NPA to arrive Net NPA.
1. Balance in interest suspense A/c., if applicable.
2. DICGC/ECGC claim received and held pending adjustment.
3. Part payment received and kept in suspense account.
4. Total provisions held excluding technical write off made at Head-Office and
provision on standard assets.
3.7 NPA IS A LOAN OR ADVANCES WHERE :
1. Term Loan Account :
It becomes NPA if interest and or installment remain “overdue” for a period of more
than 90 days. Overdue :- “An amount due to the bank under credit facility is overdue if it is
not paid on the de date fixed by the bank”.
2. Cash Credit and Overdrafts :
As cash credit or an overdrafts account should be treated as NPA if such accunt

remains “Out of Order”.
Out of Order Status :
An account should be treated as Out of Order in case of occurrence of any one of the
following :
i) If the balance in the account continuously in excess of the sanctioned limit /

drawing power for a period more than 90 days. Or
ii) If outstanding balance in the principal operating account is less than the sanctioned
limit / drawing power but there are no credits continuously for 90 days as on the
date of balance sheet. Or
iii) If there are credits in the account then the total of such credits not enough to cover
the interest debited to the account during the period.
3. Bill Purchased / Discounted :
In the case of Bills Purchased / Discounted (Inland or Foreign) it will be NPA if the
Bills Purchased / Discounted remain “Overdue” for a period of more than 90 days after its due
date. The period of 90 days is to be reckoned as from the date presentation of bill in the case
of Demand Bills and from the date of expiry of usance period of the bill in respect of Usance
Bills.
In case of Bills Discounting facility is given in the form of limit. If any bill remains
overdue for more than 90 days, the entire dues under the Bills Discounting limit should be
treated as NPA.
4. Agricultural Advances :
In the case of agricultural loans, other than direct finance to farmers for agriculture
purpose, identification of NPAs would be done on the same basis as non-agricultural
advances.
Bank should classify an account as NPA only if the interest charged during any quarter
is not serviced fully within 90 days from end of the quarter.
Some of the important aspects which should be borne in the mind while treating the
advances as NPA are summarized below :
i) Availability of security or borrowers status is not to be taken into account for

treating an advance as NPA.
ii) If any interest which had not become „past due‟ as on the date of the last balance
sheet and was, therefore treated as „income‟ continues to remain unpaid and
become „past due‟ in the current accounting year, the bank will have to make
provision for this amount from its current year‟s income.
iii) In case of bad and doubtful debts any interest which was overdue, is subsequently
recovered, it can be credited to the Profit & Loss A/c. as income.
iv) If more than one loan facility have been sanctioned to a single borrower and one of
these account turns NPA, then all other facilities granted to him have to be treated
as NPA (even when the other accounts may not be showing defaults)
v) In the case of term loans, if the bank has allowed a certain period of moratorium,
for payment of installments, this period should be excluded for calculating overdue
installments.
vi) In the case of Housing Loans granted to the bank follows a procedure of
recovering interest only after all installments of loan have been recovered, interest
does not become “Overdue” till it actually falls due for payment.
vii) In the case of advances, which have been guaranteed by Central/ State
Governments they are not to be treated as NPA. However, interest on such
advances should not be treated as „income‟ till it is actually received by the bank.
From the financial year 2000-2001, this provision has been modified.
CHAPTER – IV
DATA ANALYSIS AND

INTERPRETATION
YEAR WISE NPA POSSITION AS ON
ST ST
31 MARCH 2017 TO 31 MARCH 2019
(Rs. In Lakhs)
Sr. NO. Classification 2016-17 2017-18 2018-19
1 Loans and Advances 2688.00 3840.82 5629.00
2 Standard 1518.00 2734.97 4555.00
3 Gross NPA
Sub-Standard 222.00 25.19 14.00
Doubtful 944.00 1078.66 1050.00
Loss 4.00 2.00 10.00
Total 1170.00 1105.85 1074.00
4 Provision
Sub-Standard 22.00 2.99 2.00
Doubtful 613.00 748.20 814.00
Loss 4.00 2.00 10.00
Total 639.00 753.19 826.00
5 Net NPA 531.00 352.66 248.00
Ratio of Standard Asset to Loans and Advances
Formula :-
Standard Assets/Loans and Advances*100
Year 2016-17 2017-18 2018-19
Standard Assets 1518.00 2734.97 4555.00
Loans and Advances 2688.00 3840.82 5629.00
The Ratio 56.47% 71.20% 80.92%
Standard Asset
90
80
70
60
50
Ratios
40
30
20
10
0
2016-17 2017-18 2018-19
Interpration :-
From the above table it is quite clear that the ratio of standard asset to loans
and advances is increased from 56.47% in year 2016-17 to 80.92% in 2018-19. Which is
indicates to reduce the Non Performing Assets of the bank which shows efficient management
of loans and advances.
Ratio of Sub-Standard Assets To Loans And Advances
Formula :-
Sub-Standard Assets/Loans and Advances*100
Year 2016-17 2017-18 2018-19
Sub-Standard Assets 222.00 25.19.000 14.00
Loans and Advances 2688.00 3840.82 5629.00
Ratios 8.25% 0.65% 0.24%
Sub-Standard Assets
0
2016-17 2017-2018 2018-19
Interpration :-
From the above table it is quite clear that the ratio of sub-standard assets to
loans and advances is increased from 8.25% to 0.24%. Which indicates that the bank has
efficiently management sub-standard assests satisfied
Ratio of Doubtful Assets To Loans and Advances
Formula:-
Doubtful Assets/Loans and Advances*100
Year 2016-17 2017-18 2018-19
Doubtful Assets 944.00 1078.66 1050.00
Loans And Advances 2688.00 3840.82 5629.00
Ratios 35.11% 28.08% 18.16%
Doubtful asset
2016-17
2017-18
2018-19
Interpration:-
From the above table it is quite clear that the ratio of doubtful assets to loans
and advances is reduced from 35.11% to18.16%. Which is shows the bank has recoverd
doubtful loan account balances
Ratio of Loss Asset To Loans and Advances
Formula :-
Loss Assets/Loans and Advances*100
Year 2016-17 2017-18 2018-19
Loss Assets 4.00 2.00 10.00
Loans and Advances 2688.00 3840.82 5629
Ratios 0.14% 0.05% 0.17%
Loss Assets
2016-17
2017-18
2018-19
Interpration :-
From the above table it is quite clear that the ratio of loss assets to loans and
advances is remand constant at about 0.15%
Ratio of Gross NPA To Loans and Advances
Formula :-
Gross NPA/Loans and Advances
Year 2016-17 2017-18 2018-19
Gross NPA 1170.00 1105.85 1074.00
Loans And Advances 2688.00 3840.82 5626.00
Ratios 43.52% 28.79% 19.07%
Gross NPA
50
45
40
35
30
25
20
15
10
0
2016-17 2017-18 2018-19
Interpration :-
From the above table it is quite clear that there is reduction in the ratio of
gross NPA to loans and advances is reduced from 43.52% in year 2016-17 to 19.07% in year
2018-19. Which indicates that due to a recovery in NPA accounts. The bank could able to
reduce the ratios
Ratio Of Net NPA To Loans and Advances
Formula :-
Net NPA/Loans and Advances
Year 2016-17 2017-18 2018-19
Net NPA 531.00 352.66 248.00
Loans and Advances 2688 3840.82 5629
Ratios 19.75% 9.18% 4.40%
Net NPA
25
20
15
10
0
2016-17 2017-18 2018-19
Interpration
asset to loans and advances from 19.75% in year 2016-17 to 4.40% in year 2018-19. Which
indicates that there is a recovery in Non Performing Assets accounts
Ratio of Provision to Net NPA
Formula:-
Provisoning NPA/Net NPA*100
Year 2016-17 2017-18 2018-19
Provision 639.00 753.19 826.00
Net NPA 531.00 352.66 248.00
Ratios 120.33% 213.57% 333.06%
Provisoning
350
300
250
200
150
100
50
0
2016-17 2017-18 2018-19
Interpration :-
From the above table it is quite clear that there is agnaist provision NPA.
Which is no.of times hiher than the amount of Net NPA. Which indicates that bank
management has take proper agnaist the NPA accounts.
Ratio of Provisioning to Loans and Advances
Formula:-
Provision/Loans and Advances*100
Year 2016-17 2017-18 2018-19
Provision 639.00 753.19 826.00
Loans and Advances 2688 3840.82 5626.00
Ratios 23.77% 19.61% 14.67%
Provision NPA
25
20
15
10
0
2016-17 2017-18 2018-19
Interpration :-
provision to loans and advances is reduced from 23.77% to 14.77% even through there is
reduction in the ratio. The amount of provision made is sufficient to take care of the NPA
accounts
CHAPTER-V
OBSERVATION AND
SUGGESTIONS
 The bank should classify loans and advances as per potional loans given by Reserve
Bank of India
 Bank should observe the guidelines issued Reserve Bank of India on income
recognazation and assets classification
 Bank should have a monthly report on NPA accounts. Which should be discuss in the
Board of Directors meeting
 Bank should take insurance of the value of security given to the bank
agnaistThethebank should take valuation reports of the immoveble property takken as security
loans at least once in 3 months.
 The bank should implement credit supervision strictly as per the bank.
loan The bank should have strict credit appraisal system and disbursement of the
should be done directly by making payment to the suppliers. So as to avoid
diverasation of fund
 Bank should optain periodical and financial statement copies of Income tax
return,
VAT return, Service tax return from the borrowr‟s account
loan and
Bank should suggestion the technic of analysis of risk innovolved in the disbuserment of
the rate of intrest should be liked with the level of risk.
BIBLIOGRAPHY
The all project information and data has taken from fallowing sources :-
1) Referance Books
 Fundamentals of Financial Management
(Prasanna Chandra)
 Management accounting
(I.M.Panday )
 Management Accounting
(R.K.Sharma&S.K.Gupta)
 Bank Audit book
2) Annul Report of Solapur Janata Sahakari Bank
(year of 2016-17,2017-18&2018-19)
3) Internet :- Google search
4) Website: www.sjsbbank.com

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A

“A STUDY OF NON PERFORMING ASSET OF SOLAPUR JANTA SAHAKARI

BHARATI VIDYAPEETH UNIVERSITY, PUNE.

IN PARTIAL FULFILLMENT FOR THE DEGREE OF

BACHELOR OF BUSINESS ADMINSTRATION

MR. ROHAN R MENDAKE

UNDER THE GUIDANCE OF

THROUGH THE DIRECTOR

ABHIJIT KADAM INSTITUTE OF MANAGEMENTAND SOCIAL SCIENCES,

(M.A M.Phil. Ph.D)

This is to certify that MR. ROHAN R MENDAKE has satisfactorily

I hereby declare that the project report entitled “A STUDY OF NON

authorities deem fit.

Mr.ROHAN RAJSHEKHAR MENDAKE

This study is an attempt STUDY OF THE NON PERFORMING ASSETS

Mr. ROHAN R MENDAKE

Sr. No. Particulars Page No.

INTRODUCTION OF THE STUDY:

1.4 RESEARCH METHODOLOGY:-

Methods of data collection:-

2.1 Introduction To Organization:-

Name : Solapur Janata Sahakari Bank Ltd. Solapur

Establishment : 23 /04 / 2010

Working Hrs. : 9:30 AM to12:30 AM & 5:00 PM to 7:00 PM

Phone Number : 0217 – 2741136/37

2.3 HISTROY & GROWTH OF THE ORGANIZATION

2.4 Bank provides the special facilities to customer are as follows

• Housing finance is provided.

• Money transfers (DD/MT/TT)

• RTGS/NEFT (electronic transfer)

• Gold loans are also provided

• Safe deposited, lockers, ATM.

2.5 AREA OF OPERATION

Solapur Janata Sahakari Bank Ltd. Is Located in 7 district of Maharashtra i.e.Solapur,

Chief Executive Officer

March 2013 - 1400 cores

March 2014 - 1700 corers

March 2015 – 2000 corers

March 2016 – 2200 corers

March 2017 – 2500 corers

March 2018 – 3000 corers

In 2018 – 2500 corers is deposit and 700 corer is loan

3.1 CONCEPT & DEFINITION :

An asset, including a leased asset, becomes non-performing when it ceases to generate

ii) The account remains „out of order‟ in respect of an Overdraft/Cash Credit

vi) In respect of derivative transactions, the overdue receivables representing positive

3.2 BASIC TYPES OF NPA

3.3 CAUSES OF NPA

NPA arises due to a number of factors or causes like :-

 Speculation : Investing in high risk assets to earn high income.

 Default : Willful default by the borrowers.

 Fraudulent practices : Fraudulent Practices like advancing loans to ineligible

 Internal reasons : Many internal reasons like inefficient management, inappropriate

 External reasons : External reasons like a recession in the economy, infrastructural

 Better and speedier realization from Non-Performing Assets : Provides a

 Transparency and Visibility of Information on NPA : The portal will carry

 Better efficiencies in the management of NPAs : While traditionally we used

 Attracting prospective investors / buyers from across the globe :

 Revival of a sick unit / industry by infusing required capital through

3.5 CONCEPT OF NON-PERFORMING ASSET

Based on Narasimham committee recommendations RBI has implemented prudential

3.6 NON-PERFORMING ASSET (NPA) :

3.6 A Gross NPA and Net NPA :