PROJECT REPORT

on

A STUDY ON NON PERFORMING ASSETS OF ICICI

BY

MONISH U REDDY

1NH18MBA50

Submitted to

DEPARTMENT OF MANAGEMENT STUDIES

NEW HORIZON COLLEGE OF ENGINEERING,

OUTER RING ROAD, MARATHALLI,

BENGALURU
In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

Mr. Sheshu A

Senior Assistant Professor

2018 - 2020
 CERTIFICATE

This is to certify that Monish U Reddy bearing 1NH18MBA50, is a bonafide student

of Master of Business Administration course of the Institute 2018-2020, autonomous
program, affiliated to Visvesvaraya Technological University, Belgaum. Project
report on “Study Of Non Performing Assets” is prepared by him under the guidance
of Prof , Seshu A, in partial fulfillment of requirements for the award of the degree
of Master of Business Administration of Visvesvaraya Technological University,
Belgaum Karnataka.

Signature of Internal Guide Signature of HOD Principal

Name of the Examiners with affiliation Signature with date

1. External Examiner

2. Internal Examiner
 DECLARATION

I, MONISH U REDDY , hereby declare that the project report on “A STUDY ON NON PERFORMING
ASSETS ” with reference to “ ICICI BANK ” prepared by me under the guidance of Prof. Seshu A, faculty of
M.B.A Department, New Horizon College of Engineering.

I also declare that this project report is towards the partial fulfilment of the university regulations for the award
of the degree of Master of Business Administration by Visvesvaraya Technological University, Belgaum.

I have undergone an industry project for a period of Eight weeks. I further declare that this report is based on
the original study undertaken by me and has not been submitted for the award of a degree/diploma from any
other University / Institution.

Signature of Student
Place: BANGALORE
Date: 10/03/2020
 ACKNOWLEDGEMENT

The successful completion of the project would not have been possible without the guidance
and support of many people. I express my sincere gratitude to Mr.Karthi VB, Finance
Manager, ICICI Bank, Bengaluru, for allowing to do my project at ICICI Bank.

I thank the staff of ICICI Bank, Bengaluru for their support and guidance and helping me in
completion of the report.

I am thankful to my internal guide Prof. Seshu A, for his constant support and inspiration
throughout the project and invaluable suggestions, guidance and also for providing valuable
information.

Finally, I express my gratitude towards my parents and family for their continuous support
during the study.

MONISH U REDDY
1NH18MBA50
 TABLE OF CONTENTS

SL. NUMBER CONTENTS PAGE NUMBERS

1 Executive Summary 6-9

2 Theoretical Background Of The Study 10-14

3 Industry Profile &Company Profile 15-29

4 Application Of Theoretical Framework 30-44

Analysis And Interpretation Of Financial
5 45-61
Statements And Reports
Learning Experience- Findings,
6 62-67
Suggestions And Conclusion

7 Bibliography 68-73
CHAPTER 1

EXECUTIVE
SUMMMARY
EXECUTIVE SUMMARY

Non Performing Assets have been a major stumbling block hindering the gain of Indian business and
personal banks before 1992 , the banks failed to disclose the unhealthy debts sustained or with command by
them Associate in Nursing the provision created for identical fearing that it's going to have an
adverse result . due to the low levels of gain, banks closely-held funds had to
be reinforced and authorised by continual infusion of extra capital by the state additionally because
the central government .
The introduction of prudent norms and rules strengthen the banks monetary position and enhance
transparency is taken into account as a milestone live within the monetary sector reforms .
Such prudent norms relate to financial gain recognition, plus classification, provisioning
for unhealthy and uncertain debts and capital adequacy. Associate in Nursing searching & Descriptive study
was adopted to attain the objectives of the study, and also the study was conducted in ICICI Bank,
Indiranagar, Bangalore for “ Non performing Assets ”. The overall objective of the study was to
investigate the NPA level in ICICI Bank with comparison to different monetary establishments .

The study was conducted with the subsequent objectives :-

To investigate Non performing assets level of ICICI bank .
To look at which way bank has been recovering and reducing the NPA level.
To check recovery procedures of ICICI bank .
To recommend measures for economical management of Non performing arts assets .

The major limitations of the study was moving into in depth info with the director additionally because
the officers oftentimes and conjointly gathering the thorough monetary knowledge needed for the
calculations. Inspite most effort has been place to hit a most applicable conclusion . the strategy adopted
for assortment of information was personal interview with most of the bank officers & records of previous
years . it absolutely was conjointly sourced from the secondary knowledge for a more robust conclusion
. when aggregation knowledge from the several sources, analysis & interpretation of information has
been created. On analyzing all the information, the findings were as follows :-

• Web advances square measure Associate in Nursing upward trend

• Information superhighway non performing arts assets square measure increasing
• Workers square measure being increasing however there's no result on the recovery created

All the findings, logical conclusions square measure drawn and additional, appropriate suggestions &
recommendations square measure arrived . the whole project report is given within the style of a
report mistreatment chapter schemes provided by the faculty authorities , developed logically
and consecutive from govt outline to listing .

Always a robust banking industry is vital for flourishing economy thanks to varied reasons . one among the
foremost necessary and major roles contend by banking sector is that of disposal business.
It's typically inspired as a result of it's the result of funds being transferred from the system to
productive functions , that cojointly results into economic process. As there square measure blessings and
drawbacks of everything , identical is with disposal businesses that carries credit
risk continuously , that arises from the failure of receiver to fulfil his a part of written agreement obligations
either throughout the course of a group action or on a future obligation . The failure of the banking
sector could have a adverse impact on different sectors additionally .

Non performing arts assets square measure one amongst of the main considerations for banks in Asian
country every currently and so . Non performing arts assets replicate the performance of banks . A high level
of Non performing arts pluss recommend high likelihood of an outsized range of credit defaults that have an
effect on the gain and web value of banks and conjointly reduces the worth of the asset. The non performing
arts assets growth involves the requirement of provisions, that reduces the profits and
shareholders price. The difficulty of Non performing arts Assets has been mentioned at length for financial
set-up everywhere the globe.

The matter of NPAs isn't solely touching the banks however conjointly the entire economy. Indeed high
level of NPAs in Indian banks is nothing however a mirrored image of the state of health of the trade and
trade. This project deals with understanding the thought of NPAs, its magnitude Associate in Nursing major
causes for an account turning into non-performing, projection of NPAs over next years in banks
and terminal remarks. The magnitude of NPAs have an immediate impact on
Banks gain lawfully {they square measure they're} not allowed to book financial gain on such accounts and
at identical time banks are forced to create provisions on such assets as per run pointers .
These are amended variety of times since1997.
As per their pointers the that means of NPAs, the norms concerning assets classification and provisioning
Its currently terribly acknowledged that the banks and monetary establishments in Asian country face the
matter of amplification of non-performing assets (NPAs) and also the issue is turning
into additional and additional unmanageable. So as to bring things in check, varied steps are taken .
Among different steps most vital one was the introduction of securitization and construction of
economic Assets and social control of interest Act, that was a crucial step towards elimination and reduction
of NPAs.

Associate in Nursing plus is assessed as non-performing plus (NPAs) if dues within the style of principal
and interest aren't paid by the receiver or borrowers for a amount of a hundred and eighty days
, but with result from March 2004, default standing would incline to a receiver if
dues aren't purchased ninety days.

If any advance or credit facility granted by bank to a receiver becomes non-performing, then the
bank can have to be compelled to treat all the advances/credit facilities granted to it receiver as non-
performing while not having any relevancy the actual fact that there should still exist sure advances / credit
facilities having performing arts standing. The NPA level of our banks is far high than international
standards. Indian banks ought to lookout to make sure credit worthy customers. this context “prevention is
usually higher than cure” acts because the golden rule to scale back the amount of non performing assets .
CHAPTER 2

THEORETICAL
BACKGROUND
BACKGROUND

Granting of credit for economic activities is that the prime duty of banking. excluding raising resources
through contemporary deposits, borrowings and usage of funds received back from borrowers represent a
significant a part of funding credit dispensation activity. disposition is mostly inspired as a result
of it's the result of funds being transferred from the system to productive functions, which
ends into economic process. but disposition additionally carries a risk referred to as credit risk, that arises
from the failure of recipient. Non-recovery of loans along side interest forms a significant hurdle within
the method of credit cycle. Thus, these loan losses have an effect on the banks profit on an
outsized scale. The' complete elimination of such losses isn't doable, however banks will perpetually aim to
stay the losses at . at a coffee level. Non-performing quality (NPA) has emerged since over a decade
as associate horrendous threat to the industry in our country causing distressing signals on the property and
endurability of the affected banks.

The positive results of the chain of measures affected underneath banking reforms by the
govt of India and run batted in in terms of the Narasimhan Committee Reports during this up to
date amount are neutralised by the unwell effects of this billowing threat. Despite varied priority steps
administered to unravel and finish this downside, concrete results square measure elusion. it's a
sweeping and every one pervasive virus confronted universally on banking and money establishments. main
aim of any individual is that the utilization of cash within the best manner since the India is
country wherever over half the population has downside of running the family within the best manner.

But Indian folks Janus-faced sizable amount of downside until the event of the complete fledged banking
sector. The Indian banking sector came into the developing nature largely when the 1991 government
policy. The banking sector has extremely helped the Indian folks to utilize the only cash within the best
manner as they need. folks currently have started investment their cash within the banks and
banks additionally offer merchandise returns on the deposited quantity. The folks currently have at the
foremost understood that banks offer them sensible security to their deposits then excess amounts square
measure endowed within the banks. Thus, banks have helped the folks to realize their socio economic
objectives

FACTORS FOR RISE IN NPAs

The banking sector has been facing the intense issues of the rising NPAs. however the matter of NPAs
is additional publically sector banks in comparison to non-public sector banks and foreign banks. a
powerful banking sector is vital for a flourishing economy. The failure of the banking
sector might have associate adverse impact on different sectors. The Indian banking
industry, that was operational in a very closed economy, currently faces the challenges of associate open
economy. On one hand a protected surroundings ensured that banks ne'er required to
develop refined treasury operations and quality Liability Management skills. On the opposite hand a mix of
directed disposition and social banking and consequently the next effective value of banking services. the
matter India Faces isn't lack of strict prudent norms however
The legal impediments and time intense nature of quality disposal proposal.
ii. Postponement of downside so as to point out higher earnings.
iii. Manipulation of debtors victimisation political influence. Macro Perspective Behind
NPAs plenty of sensible issues are found in Indian banks, particularly publically sector banks.
as an example, the govt of India had given a colossal wavier of Rs. 15,000 Crs. underneath the Prime
Minister ship of Mr. V.P. Singh, for rural debt throughout 1989-90. This wasn't a novel incident in India and
left a negative impression on the money dealer of the loan. financial condition elevation programs like
IRDP, RREP, SUME, SEPUP, JRY, PMRY etc., failing on varied grounds in meeting their objectives. the
massive amounts of loan granted underneath these schemes were whole lost by banks because of political
manipulation, misuse of funds and non-reliability of target market of those sections.

Loans given by banks square measure their assets and because the repayments of many of the loans were
poor, the qualities of those assets were steady deteriorating. Credit allocation became 'Lon Melas', loan
proposal evaluations were slack and as a result repayments were terribly poor. There square
measure many reasons for associate account changing into terrorist organization

EXTERNAL FACTORS

Ineffective recovery assembly the government. has set of numbers of recovery tribunals, that works for
recovery of loans and advances. because of their negligence and impotence in their work the bank suffers the
consequence of non-recover, their by reducing their profit and liquidity.  Willful Defaults There square
measure borrowers WHO square measure able to payback loans however square
measure designedly retreating it. These teams of individuals ought to be known and correct measures ought
to be taken so as to urge back the cash extended to them as advances and loans.

Natural calamities this is often the live issue, that is making horrendous rise in NPAs of the
PSBs. each currently and so India is hit by major natural calamities so creating the borrowers unable to pay
back there loans. so the bank has got to build great deal of provisions so as to compensate those
loans, thus find yourself the commercial enterprise with a reduced profit. principally ours framers depends
on rain fall for cropping. because of
irregularities of rain fall the framers aren't to realize the assembly level so they're not repaying the loans.
Industrial illness Improper project handling , ineffective management , lack of adequate resources , lack of
advance technology , day to day dynamic govt.
Policies offer birth to industrial illness. thus the banks that finance those industries ultimately find
yourself with a coffee recovery of their loans reducing their profit and liquidity
The rehabilitation arranged puzzled out by the Central govt to revive the loom sector has
not nevertheless been enforced. that the over dues thanks to the loom sectors have become NPAs.

With the exception of these factors there is also others external factors which might reason behind NPA’s,
these factors are: one. Sluggish system –
1. Long legal tangles Changes that had taken place in labour laws Lack of sincere effort.
2. inadequacy of stuff, power and alternative resources.
3. Industrial recession.
4. Shortage of stuff, raw materialinput value step-up, power shortage, industrial recession, excess capability,
natural calamities like floods, accidents.
5. Failures, non payment over dues in alternative countries, recession in alternative countries,
externalization issues, adverse exchange rates etc.
6. Government policies like excise duty changes, duty changes etc.,
INTERNAL FACTORS
Defective disposition method
There are 3 cardinal principles of bank disposition that are followed by the industrial banks since long.
i. Principles of safety
ii. Principle of liquidity
iii. Principles of gain

i. Principles of safety By safety it implies that the receiver is during a position to repay the
loan each principal and interest. The compensation of loan depends upon the borrowers:
a. capability to pay
b. temperament to pay capability to pay depends upon: one. Tangible assets a pair of. Success in
business temperament to pay depends on: one. Character a pair of. Honest
c. name of receiver The banker ought to, there fore take utmost care in guaranteeing that the enterprise or
business that a loan is wanted could be a sound one and also the receiver is capable of carrying it out with
success .he ought to be someone of integrity and smart character.

Inappropriate technology
Thanks to inappropriate technology and management system, market driven choices on real time
basis can't be taken. correct MIS and monetary method of accounting isn't enforced within
the banks, that ends up in poor credit assortment, thus NPA. All the branches of the bank ought
to be processed.  Improper swot analysis The improper strength, weakness, chance and threat analysis
is one more reason for rise in NPAs. whereas providing unsecured advances the banks rely a lot of on the
honesty, integrity, and monetary soundness and credit good of the receiver
1. Banks ought to take into account the borrowers own capital investment.
2. It ought to collect credit info of the borrowers from a. From bankers b. Enquiry from market/segment of
trade, industry, business. c. From external credit rating agencies. · Analyse the record True image of
business are disclosed on analysis of profit/loss a/c and record.
 3. Purpose of the loan once bankers offer loan, he ought to analyse the aim of the loan. to confirm safety
and liquidity, banks ought to grant loan for productive purpose solely. Bank ought to analyse the gain,
viability, long run acceptableness of the project whereas funding.
Poor credit appraisal system Poor credit appraisal is another issue for the increase in NPAs. thanks to poor
credit appraisal the bank provides advances to people who don't seem to be ready to repay it back. they
ought to use smart credit appraisal to decrease the NPAs.  social control deficiencies The
banker should choose the receiver terribly rigorously and will take tangible assets as security to safe guard
its interests. once acceptive securities banks ought to take into account the one. Marketability a pair
of. acceptableness three. Safety
4. Exchangeability :The banker ought to follow the principle of diversification of
risk supported the illustrious maxim “do not keep all the eggs in one basket”; it implies that the
banker mustn't grant advances to a number of massive farms solely or to concentrate them in few industries
or during a few cities. If a brand new bigger

Massive client meets misfortune or bound traders or industries affected adversely, the position of the
bank won't be affected. Like OSCB suffered loss thanks to the OTM Cuttack, and province hand loom
industries. the largest defaulters of OSCB as the OTM (117.77lakhs), and also
the loom sector province hand loom WCS ltd (2439.60lakhs). Absence of normal industrial visit.

The irregularities in spot visit conjointly will increase the NPAs. Absence of often visit of bank officers to
the client purpose decreases the gathering of interest and principals on the loan.

The NPAs thanks to wilful defaulters will be collected by regular visits. 

Re disposal method Non remission of recoveries to higher funding agencies and re disposal of an
equivalent have already affected the sleek operation of the credit cycle. thanks to re disposal to the defaulters
and CCBs and PACs, the NPAs of OSCB is increasing day by day. with the exception of these the
opposite internal factors are:
1.Funds borrowed for a specific purpose however not used for the aforementioned purpose.
2. Project not completed in time.
3. Poor recovery of assets.
4. Excess capacities created on non-economic prices.
5. In-ability of the company to lift capital through the difficulty of equity or alternative certificate of
indebtedness from capital markets.
6. Business failures.
7. Diversion of funds for expansion and modernization setting up new comes serving to or promoting
sister considerations.
8. Willful defaults, siphoning of funds, fraud, disputes, management disputes, mis- appropriation etc.,
9. Deficiencies on the a part of the banks viz. in credit appraisal, observance and follow-ups, delay in
settlement of payments subsidiaries by government bodies etc
 CHAPTER 3

INDUSTRY PROFILE
AND
COMPANY PROFILE
BANKING INDUSTRY

Introduction of Banking :
Bank is a establishment that's commissioned to modify cash and its substitutes by accepting time and
demand deposits, creating loans, and investment in securities. The bank generates profits from
the distinction within the interest rates charged and paid. the event of banking is associate degree inevitable
precondition for the healthy and rapid development of the national economic structure.
Banking establishments have contributed a lot of tothe development of the developed countries of the planet.

These days we tend to cannot imagine the business world while not banking establishments. Banking is
as vital as blood within the build. Due to the development of banking advances square
measure exaggerated and business activities developing therefore it is rightly aforesaid, " the event of
banking isn't solely the basis however conjointly the results of the development of the business
world." once independence, the Indian government conjointly has taken a series of steps to develop the
banking sector. because of substantial efforts of the govt, today we've got variety of banks like banking
company of Republic of India, banking company of Republic of India, nationalized industrial banks,
Industrial Banks and cooperative banks.

Indian Banks contributes highly to the event of agriculture, trade and industrial sectors. Even these days the
banking system of Republic of India possess sure limitations, however one cannot doubt its vital role in the
development of the Indian economy. Early history Banking in Republic of India originated within the last
decades of the eighteenth century. the primary banks were The General Bank of Republic of
India that started in 1786, and therefore the Bank of geographical region, each of that square measure now
defunct.

The oldest bank existing in Asian banking is that the banking company of India, that originated in the Bank
of metropolis in June 1806, which just about directly became the Bank of geographical area. This was one of
the 3 presidency banks, the opposite 2 being the Bank of metropolis and therefore the Bank of Madras,
all 3 of that were established beneath charters from British people East India Company. For many years the
Presidency banks acted as quasi-central banks, as did their successors. The three banks incorporate in
1921 to make the Imperial Bank of Republic of India, which, upon Indias independence, became
the banking company of Republic of India. Banking in India Currently, India has ninety
six regular industrial banks (SCBs) - twenty seven public sector banks (that is with the govt of India holding
a stake), thirty one non-public banks (these don't have government stake; they'll be in public listed
and listed on stock exchanges) and thirty eight foreign banks. They have a combined network of over fifty
three,000 branches and forty nine,000 ATMs. in step with a report by ICRA restricted, a rating agency, the
general public sector banks hold over seventy five p.c of total assets of the banking business, with the non-
public and foreign banks holding eighteen.2% and 6.5% severally. 11
INDIAN BANKING SECTOR Banking in Republic of India has its origin as early because
the Vedic amount.
it's believed that the transition from money disposition to banking should have occurred even before
Manu, the good Hindu Jurist, who has devoted a region of his work to deposits and advances
and ordered down rules about rates of interest. throughout the Mogul amount,
the autochthonic bankers compete a awfully vital role in lending cash and funding foreign trade and
commerce. throughout the times of the East India Company, it absolutely was the flip of the
agency homes to hold on the banking business. The General Bank of Republic of India was the
primary Joint Stock Bank to be established within the year 1786. The others which followed were the Bank
of geographical region and therefore the geographical area Bank.

The Bank of geographical region is reported to have continuing until 1906 whereas the
opposite 2 failing within the in the meantime. within the half of the 19thcentury the East India Company
established 3 banks; the Bank of geographical area in 1809, the Bank of metropolis in 1840 and therefore
the Bank of Madras in 1843. These 3 banks conjointly known as Presidency Banks were freelance units and
functioned well. These 3 banks were amalgamated in 1920 and a brand new bank, the Imperial Bank
of Republic of India was established on27thJanuary 1921. With the passing of the banking company of
Indian Act in 1955 the enterprise of the Imperial Bank of India was confiscate by
the fresh ingrained banking company of India. The Reserve Bank that is that the financial organisation was
created in 1935 by passing banking company of Republic of India Act 1934.

In the wake of the Swadeshi Movement, variety of banks with Indian management were established within
the country specifically, geographical area commercial bank Ltd, Bank of Republic of
India Ltd, Kanara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the financial
organisation of Republic of India Ltd. On July 19, 1969,14 major banks of the country were nationalized and
in fifteenth Apr 1980 six additional commercial private sector banks were conjointly confiscate by the govt.

Banking in India, Structure of the organized banking sector in India. Numbers of financial institutions
measure in brackets run financial organisation and supreme financial Authority regular Banks industrial Co-
Operatives Banks Foreign Regional Urban co- State Co- Banks Rural operatives Operatives (40) Banks(196)
(52) (16) ) Public sector non-public Sector Banks (27) Banks (30)SBI and
Associate alternative NationalBanks (8) thirteen Banks (19)
HISTORY

Early history Banking in Republic of India originated within the last decades of the eighteenth century. The
primary banks were the overall Bank of Republic of India, that started in 1786, and therefore the Bank
of Hindustan, each of that square measure currently defunct. The oldest bank living in Asian Country is that
the banking concern of India, that originated within the Bank of metropolis in Gregorian calendar
month 1806, which just about straightaway became the Bank of Bengal. This was one
among the 3 presidency banks, the opposite 2 being the Bank of Bombay and therefore the Bank of Madras,
all 3 of that were established beneath charters from Brits East Indies Company. for several years the
Presidency banks acted as quasi-central banks, as did their successors.

The 3 banks united in 1925 to make the Imperial Bank of Republic of India, which, upon India's
independence, became the banking concern of Republic of India. Indian merchants in metropolis established
the Union Bank in 1839, however it unsuccessful in 1848 as a consequence of the economic condition of
1848-49. The Allahabad Bank, established in 1865 and still functioning these days, is that the oldest Joint
Stock bank in Republic of India. it absolutely was not the primary although. That honor belongs to the Bank
of higher Republic of India, that was established in 1863, and that survived till 1913, once it unsuccessful,
with a number of its assets and liabilities being transferred to the Alliance Bank of
Simla. once the yank war stopped the availability of cotton to geographic region from the Confederate States
of America, promoters opened banks to finance commerce in Indian cotton. With giant exposure to
speculative ventures, most of the banks opened in Republic of India throughout that amount unsuccessful.
The depositors lost cash and lost interest keep deposits with banks.

After, banking in Republic of India remained the exclusive domain of Europeans for
next many decades till the start of the twentieth century. Foreign banks too began
to arrive, notably in metropolis, within the decennium. The Comptoire d' Escompte First State Paris opened
a branch in metropolis in 1860, and another in Bombay in 1862; branches in Madras and Pondichery, then a
French colony, followed. HSBC established itself in Bengal in 1869. metropolis was the
foremost active commerce port in Republic of India, chiefly because of the trade
of Brits Empire, then became a banking center. the primary entirely Indian joint stock bank was the
Oudh depository financial institution, established in 1881 in Faizabad. It unsuccessful in 1958. Ensuing was
the Punjab commercial bank, established in

Metropolis in 1895, that has survived to this and is currently one among the biggest banks in Republic of
India. round the flip of the twentieth Century, the Indian economy was passing through a relative amount of
stability. Around 5 decades had march on since the insurrection, and therefore the social, industrial
and different infrastructure had improved. Indians had established little banks, most
of that served explicit ethnic and non secular communities. The presidency banks dominated banking
in Republic of India however there have been additionally some exchange banks and variety of Indian joint
stock banks. of these banks operated in numerous segments of the economy. The exchange banks, largely in
hand by Europeans, focused on finance foreign trade. Indian joint stock banks
were typically beneath capitalized and lacked the expertise and maturity to vie with the presidency and
exchange banks.
This segmentation let Lord Curzon to look at, "In respect of banking it appears we have a tendency to square
measure behind the days. we have a tendency to square measure like some quaint sailing vessel, divided by
solid picket bulkheads into separate and cumbersome compartments." the amount between 1906 and 1911,
saw the institution of banks impressed by the Swadeshi movement. The Swadeshi
movement impressed native businessmen and political figures to found banks of and for the Indian
community. variety of banks established then have survived to this like Bank of Republic of India,
Corporation Bank, Indian Bank, Bank of Baroda, geographic region Bank and financial
organisation of Republic of India.

The zeal of Swadeshi movement cause establishing of the many personal banks in Dakshina South
Dravidian and Udupi district that were unified earlier and glorious by the name South geographic region (
South geographical area ) district. Four nationalised banks started during this district and additionally a
number one personal sector bank. therefore undivided Dakshina South Dravidian district is thought as
"Cradle of Indian Banking". From warfare I to Independence the amount throughout the
primary warfare (1914-1918) through the tip of the Second warfare (1939-1945),
and 2 years thenceforth till the independence of Republic of India were difficult for Indian banking. The
years of the primary warfare were turbulent, and it took its toll with banks merely collapsing despite the
Indian economy gaining indirect boost because of war-related

Economic activities. a minimum of ninety four banks in Republic of India unsuccessful between 1913 and
1918 as indicated within the following table: Years variety of banks that unsuccessful Authorised capital
(Rs. Lakhs) paid Capital (Rs. Lakhs) one913 twelve 274 thirty five 1914 forty two seven10 109
1915 eleven fifty six five 1916 thirteen 231 four 1917 nine seventy six twenty five 1918 7 209 1 Post-
independence The partition of Republic of India in 1947 adversely compact the economies
of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the tip of
a regime of the individualistic for the Indian banking. the govt of Republic of India initiated measures to
play a lively role within the economic lifetime of the state, and therefore the Industrial Policy Resolution
adopted by the govt in 1948 envisaged a economic system. This resulted into bigger involvement of the
state in numerous segments of the economy as well as banking and finance. the most important steps to
manage banking included: • In 1948, the banking concern of Republic of India, India's central banking
authority, was nationalized, and it became an establishment in hand by the govt of Republic of India. • In
1949, the Banking Regulation Act was enacted that authorized the banking concern of Republic of
India (RBI) "to regulate, control, and examine the banks in Republic of India

The Banking Regulation Act additionally given that no new bank or branch of associate existing bank may
be opened while not a license from the tally, and no 2 banks might have common administrators. However,
despite these provisions, management and rules, banks in Asian nation except the banking company of
India, continued to be owned and operated by non-public persons. This modified with the nationalisation of
major banks in India on nineteen Gregorian calendar month, 1969.

Nationalisation By the Sixties, the Indian banking system has become a very important tool to facilitate the
event of the Indian economy. At identical time, it's emerged as an outsized leader, and a dialogue has
ensued concerning the chance to nationalise the banking system. solon, the-then Prime Minister of India
expressed the intention of the GOI within the annual conference of the All India Congress Meeting in a
very paper entitled "Stray thoughts on Bank Nationalisation." The paper was received with positive
enthusiasm. Thereafter, her move was swift and sharp, and also the GOI issued associate ordinance and
nationalised the fourteen largest industrial banks with impact from the time of day of Gregorian calendar
month nineteen, 1969.

Jayaprakash Narayan, a political leader of India, represented the step as a "masterstroke of political
sagacity." at intervals fortnight of the problem of the ordinance, the Parliament passed the
Banking corporations (Acquisition and Transfer of Undertaking) Bill, and it received the presidential
approval on nine August, 1969. A second dose of nationalization of via lot of industrial banks followed in
1980. The declared reason for the nationalization was to convey the government a lot of management of
credit delivery. With the second dose of nationalization, the GOI controlled around ninety one of the
banking business of India. Later on, within the year 1993, the government unified New Bank
of India with Punjab commercial bank. It had been the sole merger between nationalized banks and
resulted within the reduction of the quantity of nationalised banks from twenty to nineteen.

After this, till the Nineteen Nineties, the nationalised banks grew at a pace of around four-
dimensional, nearer to the common rate of growth of the Indian economy. The nationalised banks
were attributable by some, as well as Home minister P. Chidambaram, to possess helped the Indian
economy face up to the world monetary crisis of 2007-2009.[1][2]

Relaxation within the early Nineteen Nineties, the then Narsimha Rao government launched into a policy
of relaxation, licensing a little variety of personal banks. These came to be called New Generation tech-
savvy banks, and enclosed international Trust Bank (the initial of such new generation banks to be set
up), that later amalgamated with Oriental Bank of Commerce, UTI Bank(now re-named as Axis Bank),
ICICI Bank and HDFC Bank. This move, beside the zoom within the economy of India, revitalised the
banking sector in India, that has seen zoom with sturdy contribution from all the 3 sectors of banks, namely,
government banks, non-public banks and foreign banks. consecutive stage for the Indian banking has been
setup with the planned relaxation within the norms for Foreign Direct Investment, wherever all Foreign
Investors in banks could also be given pick rights that might exceed this cap of 100%,at present it's gone up
to forty ninth with some restrictions. The new policy cask the Banking sector in India fully.

Bankers, until this point, were wont to the 4-6-4 methodology (Borrow at 4%;Lend at 6%;Go home at 4) of
functioning. The new wave ushered in a very trendy outlook and tech-
savvy strategies of operating for ancient banks.All this junction rectifier to the retail boom
in India. folks not simply demanded a lot of from their banks however additionally received a lot
of. presently (2007), banking in India is mostly fairly mature in terms of offer, product vary and reach-
even tho' reach in rural India still remains a challenge for the non-public sector and foreign banks.

In terms of quality of assets and capital adequacy, Indian banks ar thought-about to

possess clean, sturdy and clear balance sheets relative to alternative banks in comparable economies in its
region. The bank of India is associate autonomous body, with smallest pressure from the govt.
The declared policy of the Bank on the Indian rupee is to manage volatility however with
none fastened exchange rate-and this has principally been true
CHALLENGES FACED BY BANKING INDUSTRY IN INDIA

The industry in India is undergoing a significant transformation thanks to changes in economic conditions
and continuous freeing. These multiple changes happening one once alternative encompasses
a ripple result on a bank making an attempt to graduate from utterly regulated sellers market to completed
deregulated customers market. · Deregulation: This continuous freeing has created the Banking
market very competitive with bigger autonomy, operational flexibility, and decontrolled charge per unit and
liberalized norms for interchange. The freeing of the trade as well as liberalise in interest rates has diode to
entry of variety of players within the industry. At identical time reduced company credit off take because
of sluggish economy has resulted in sizable amount of competitors battling for identical pie. · New rules: As
a result, the market place has been redefined with new rules of the sport. Banks area unit reworking to
universal banking, adding new channels with moneymaking rating and freebees to supply.
Efficiency: This successively has created it necessary to seem for efficiencies within the business.
Banks have to be compelled to access low value funds and at the same time improve the potency. The
banks face rating pressure, squeeze on unfold and ought to provide thrust on retail assets
· subtle client loyalty: this can undoubtedly impact client preferences, as they're sure to react to the
worth jurisdictions offerings. Customers became exigent and also the loyalties area unit subtle. There area
unit multiple decisions, the pocketbook share is reduced per bank with demand on flexibility and
customization.

Given the comparatively low shift costs; client retention necessitate made-to-order service
and trouble free, perfect service delivery. Misaligned mindset: These changes area unit making challenges,
as staff area unit created to adapt to dynamical conditions. There's resistance to alter from staff and also
the vender market mental attitude is nevertheless to be modified as well as concern of uncertainty
and management orientation. Acceptance of technology is slowly crawl in however the use isn't maximised.
· competence Gap: inserting the proper talent at the proper place can confirm success.
The competence gap must be self-addressed at the same
time otherwise there'll be uncomprehensible opportunities. the main target of individuals are on doing
work however not providing solutions, on escalating issues instead of finding them and on disposing
customers rather than exploitation the chance to cross sell. Strategic choices with banks to address the
challenges Leading players within the trade have commenced a series of strategic and plan of
action initiatives to sustain leadership. the key initiatives include: · investment in state of the art
technology because the back bone of to make sure reliable service delivery · investment the branch network
and sales structure to mobilize low value current and savings deposits ·
COMPANY PROFILE

ICICI cluster In 1955, the commercial Credit and Investment Corporation of Asian
country restricted (ICICI) incorporated at the initiative of the globe Bank, the govt of Asian country and
representatives of Indian business, with the target of making a development institution for providing
medium-term and long project finance to Indian businesses. Mr.A.Ramaswami Mudaliar elective because
the 1st Chairman of ICICI restricted. ICICI emerges because the major supply of foreign currency loans to
Indian business. Besides funding from the globe Bank and alternative multi-lateral agencies, ICICI
was additionally among the primary Indian firms to boost funds from international
markets summary ICICI cluster offers a good vary of banking merchandise and monetary services
to company and retail customers through a range of delivery channels and thru its specialised cluster firms,
subsidiaries and affiliates within the areas of non-public banking, investment banking, life and general
insurance, risk capital and quality management.

With a robust client focus, the ICICI cluster firms have maintained and increased their leadership position in
their individual sectors. ICICI Bank is India's second-largest bank with total assets of Rs. 3,997.95 billion
(US$ a hundred billion) at March thirty one, 2008 and profit once tax of Rs. 41.58 billion for the
year terminated March thirty one, 2008. ICICI Bank is second amongst all the businesses listed on the
Indian stock exchanges in terms of free float capitalisation. The Bank includes a network
of regarding one,308 branches and three,950 ATMs in Asian country and presence in eighteen countries.
ICICI prudent life assurance Company may be a 74:26 venture with prudent plc (UK). it's the most
important personal sector life assurance company giving a comprehensive suite of life, health and
pensions merchandise. It's additionally the pioneer in launching innovative health
care merchandise like polygenic disorder Care and Cancer Care. the corporate operates on a multi-
channel larger platform and has distribution strength of over a pair of,
90,000 monetary advisors operative from 1956 branches unfold across 1669 locations across the
country. Additionally to the agency force, it additionally has tie-ups with numerous banks, company agents
and brokers.

In business enterprise 2008, ICICI prudent earned a market share of twelve.7% with new business weighted
premium growth of sixty eight.3% to Rs. 66.84 billion and command assets of Rs. 285.78 billion at
March thirty one, 2008. ICICI Lombard General underwriter, a venture with the North American
nation based mostly Fairfax monetary Holdings, is that the largest personal sector general underwriter. it's a
comprehensive product portfolio occupation to any or all company and retail insurance desires and is gift in
over two hundred locations across the country. ICICI Lombard General Insurance has achieved a market
share of twenty nine.8% among personal sector general insurance firms Associate in Nursing and overall
market share of 11.9% throughout business enterprise 2008.

The gross come back premium grew by eleven.4% from Rs. 30.3 billion in business enterprise 2007 to Rs.
33.45 billion in business enterprise 2008. ICICI Securities Ltd is that the largest equity house within
the country providing end-to-end solutions (including web-based services) through the most important non-
banking marketing so on fulfill all the various desires of retail and company customers. ICICI Securities (I-
Sec) includes a dominant position in its core segments of its operations - finance together with Equity
Capital Markets consultative Services, Institutional Equities, Retail and monetary Product Distribution.
ICICI Securities Primary franchise is that the largest primary dealer in Government securities. In business
enterprise 2008, it achieved a profit once tax of Rs.1.40 billion. ICICI prudent quality Management is that
the second largest investment trust with quality beneath management of Rs. 547.74 billion and a market
share of ten.2% as on March thirty one, 2008. the corporate manages a comprehensive vary of investment
trust schemes and portfolio management services to satisfy the varied investment desires of its investors
through 235 branches unfold across the country. Incorporated in 1987, ICICI Venture is that the oldest and
therefore the largest personal equity firm in Asian country. The funds beneath management of ICICI
Venture have inflated at a five year CAGR of forty ninth to Rs.95.50 billion as on March thirty one

Merchandise ICICI cluster has continuously been at the forefront of developing

innovative monetary merchandise, that caters to varied desires of individuals from all walks of life. Over the
years, it's launched many monetary merchandise that supply support, security and additional to
not simply people, however to huge and little organisations too. Banking • Personal Banking
• world personal purchasers • company Banking • Business Banking • NRI Banking Insurance & Investment
• life assurance • General Insurance • Securities • investment trust • personal Equity
ICICI BANK: ICICI Bank (formerly Industrial Credit and Investment Corporation of India) is India's
largest personal bank and conjointly the biggest bank within the country. ICICI Bank has total assets
of regarding Rs.20.05bn (end-Mar 2005), a network of over 550 branches and offices, and regarding 1900
ATMs. ICICI Bank offers a large vary of banking product and monetary services to company and retail
customers through a range of delivery channels and thru its specialised subsidiaries and affiliates within
the areas of investment banking, life and non-life insurance, capital and quality management.

ICICI Bank's equity shares square measure listed in Asian nation on stock exchanges at Kolkata and
Vadodara, the stock market, city and therefore the National stock market of Asian nation restricted and its
ADRs square measure listed on the the big apple stock market (NYSE). Formation: • the planet Bank, the
govt. of Asian nation and representatives of Indian business kind ICICI restricted as a development
finance establishment to supply medium-term and long-run project funding to Indian businesses in 1955.

. ICICI Bank offers a high-interest (5.4% gross) web bank account to Great Britain customers summary of
ICICI BANK ICICI Bank is India's second-largest bank with total assets of Rs. 3,849.70 billion (US$ eighty
two billion) at September thirty, 2008 and profit when tax Rs. 17.42 billion for
the 0.5 year over September thirty, 2008. The Bank includes a network of regarding one,400 branches
and four,530 ATMs in Asian nation and presence in eighteen countries.

ICICI Bank offers a large vary of banking product and monetary services to company and retail customers
through a range of delivery channels and thru its specialised subsidiaries and affiliates within the areas of
investment banking, life and non-life insurance, capital and quality management.

The Bank presently has subsidiaries within the uk, Russia and North American country, branches in u. s.,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and port International Finance Centre and representative
offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and country.

Our Great Britain subsidiary has established branches in Kingdom of Belgium and European nation. ICICI
Bank's equity shares square measure listed in Indian stock market and therefore the National stock market of
India restricted and its yankee Depositary Receipts (ADRs) square measure listed on the the big apple stock
market (NYSE)
• 1994 ICICI establishes ICICI Bank as a subsidiary.
• 1999 ICICI becomes initial|the primary} Indian company and therefore the first bank or financial
organisation from non-Japan Asia to list on the N. Y.
• 2001 ICICI nonheritable Bank of Madurai (est. 1943).
Bank of Madurai was a Chettiar bank, and had nonheritable Chettinad Mercantile Bank (est.
1933) and Illanji Bank (established 1904) within the Nineteen Sixties.
• 2002 The Boards of administrators of ICICI and ICICI Bank approve the merger of ICICI, ICICI Personal
monetary Services restricted and ICICI Capital Services restricted, with ICICI Bank.
once receiving all necessary regulative approvals, ICICI integrates the group's funding and banking
operations, each wholesale and retail, into one entity.
International growth • 2002 ICICI establishes representative offices in New York and London.
• 2003 ICICI opens subsidiaries in North American nation and therefore the uk (UK), and within the
kingdom it establishes alliance with Lloyds TSB.
It conjointly opens Associate in Nursing Offshore Banking Unit (OBU) in Singapore and representative
offices in urban center and Shanghai.
• 2004 ICICI opens a rep workplace in East Pakistan to faucet the in depth trade between that country, Asian
country, South Africa and African nation}.
• 2005 ICICI acquires Investitsionno-Kreditny Bank (IKB), a Russia bank with regarding US$4mn in assets,
head workplace in Balabanovo within the city region, and with a branch in capital
ICICI Bank offers a high-interest (5.4% gross) net bank account to kingdom customers summary of ICICI
BANK ICICI Bank is India's second-largest bank with total assets of Rs.
3,849.70 billion (US$ eighty two billion) at Gregorian calendar month thirty, 2008 and profit once tax Rs.
17.42 billion for the [*fr1] year concluded Gregorian calendar month thirty, 2008.
The Bank features a network of regarding one,400 branches and four,530 ATMs in Asian country and
presence in eighteen countries.
ICICI Bank offers a large vary of banking product and monetary services to company and retail customers
through a spread of delivery channels and thru its specialised subsidiaries and
affiliates within the areas of investment banking, life and non-life insurance, risk capital and plus
management.
The Bank presently has subsidiaries within the UK, Russia and North American nation, branches in us,
Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and urban center International Finance Centre and
representative offices in United Arab Emirates, China
HISTORY OF ICICI • 1955 the economic Credit and Investment Corporation of Asian country restricted
(ICICI) was incorporated at the initiative of United Nations agency, the govt of Asian country and
representatives of Indian trade, with the target of making a development financial organisation for providing
medium-term and semipermanent project funding to Indian businesses.

• 1994 ICICI established Banking Corporation as a banking subsidiary.formerly Industrial Credit and
Investment Corporation of India.
Later, ICICI Banking Corporation was renamed as 'ICICI Bank Limited'.
ICICI supported a separate legal entity, ICICI Bank, to undertake traditional banking operations - taking
deposits, credit cards, automobile loans etc.
• 2001 ICICI nonheritable Bank of Madura (est. 1943).
Bank of Madura was a Chettiar bank, and had nonheritable Chettinad Mercantile Bank (est. 1933).
• 2002 The Boards of administrators of ICICI and ICICI Bank approved the reverse merger of ICICI, ICICI
Personal monetary Services restricted and ICICI Capital Services restricted, into ICICI Bank.
once receiving all necessary regulative approvals, ICICI integrated the group's funding and banking
operations, each wholesale and retail, into one entity.
conjointly in 2002, ICICI Bank bought the Shimla and Darjeeling branches that customary leased Bank had
genetic once it nonheritable Grindlays Bank.
ICICI started its international growth by gap representative offices in big apple and London.
• 2003 ICICI opened subsidiaries in North American nation and therefore the uk (UK), Associate in
Nursingd within the kingdom it established an alliance with Lloyds TSB.
It conjointly opened Associate in Nursing Offshore Banking Unit (OBU) in Singapore and representative
offices in urban center and Shanghai.
• 2004 ICICI opens a rep workplace in East Pakistan to faucet the in depth trade between that country, Asian
country and African nation.
• 2005 ICICI nonheritable Investitsionno-Kreditny Bank (IKB), a Russia bank with regarding US$4mn in
assets, head workplace in Balabanovo within the city region, and with a branch in capital of
Also, ICICI established a branch in urban center International monetary Centre and in Hong Kong.
• 2006 ICICI Bank kingdom opened a branch in Antwerp, in Belgium.
ICICI opened representative offices in national capital, Jakarta, and national capital.
• 2007 ICICI amalgamated Sangli Bank, that was headquartered in Sangli, in geographical region State, and
that had 158 branches in geographical region and another thirty one in state State.
Sangli Bank had been supported in 1916 and was significantly robust in rural areas.
ICICI conjointly received permission from the govt of Qatar to open a branch in port.
 CHAPTER 4

APPLICATION OF
THEORETICAL
FRAMEWORK
NPA MANAGEMENT PRACTICES IN INDIAN COUNTRY

Formation of the Credit info Bureau (India) restricted (CIBIL)

Unharnessing of Willful Defaulter’s List. run conjointly releases an inventory of borrowers
with combination outstanding of Rs.1 large integer and on top of against whom banks have filed suits for
recovery of their funds
coverage of Frauds to run
Norms of Lender’s Liability – framing of honest Practices Code with relevancy lender’s liability to be
followed by banks, that indirectly prevents accounts turning into NPAs on account of bank’s own failure
Risk assessment and Risk management
RBI has suggested banks to look at all cases of willful default of Rs.1 large integer and on top of and file
suits in such cases. Board of administrators square measure needed to review FTO accounts of Rs.1 CRORE
and larger and on top of with special relevance fixing of employees answerability, covering fast mortality
cases
Special mention accounts for early identification of unhealthy debts.
Loans and advances due for fewer than one and 2 quarters would return underneath this class. However,
these accounts don't want provisioning

NPA MANAGEMENT – RESOLUTION

 Compromise Settlement Schemes

 Restructuring / Reschedulement
 Lok Adalat
 Company Debt Restructuring Cell
 Debt Recovery judicature (DRT)
 Proceedings underneath the Code of Civil Procedure
 Board for Industrial & monetary Reconstruction (BIFR)/ AAIFR
 National Company Law judicature (NCLT)
 Sale of FTO to different banks Sale of FTO to ARC/ SC underneath Securitization and
Reconstruction of monetary Assets and social control of interest Act 2002 (SRFAESI)
 Liquidation
MEASURES INITIATED BY RBI AND GOVERNMENT OF INDIA FOR REDUCTION OF NPAs

Compromise settlement schemes :

The Government of India are perpetually prodding the banks to require steps for stunning the incidence
of recent NPAs and have conjointly been making legal and restrictive surroundings to facilitate the recovery
of existing NPAs of banks. a lot of vital of them, i might prefer to recapitulate at this stage.

The broad framework for compromise or negotiated settlement of NPAs suggested by run in July 1995
continues to be in situation . Banks and financial institutions measure liberated to style and implement their
own policies for recovery and write-off incorporating compromise and negotiated settlements with the
approval of their Boards, notably for recent and unresolved cases falling underneath the FTO class.
The policy framework advised by run provides for putting in place of Associate in helping
freelance Settlement consultive Committees headed by a retired choose of the court to scrutinize
and advocate compromise proposals.

Specific pointers were issued in 1999 to public sector banks for quondam non-discretionary and non-
discriminatory settlement of NPAs of little sector. The theme was operative up to Sept thirty, 2000. [Public
sector banks recovered Rs. 668 large integer through compromise settlement underneath this scheme.

Rules were changed in July 2000 for recovery of the stock of NPAs of Rs. Five crores and fewer as on thirty
one March 1997. [The on top of pointers that were valid up to Gregorian calendar month thirty, 2001
helped the general public sector banks to recover Rs. 2600 crores by Sept 2001] Associate in
Nursing OTS theme covering advances of Rs.25000 and below continues to be operative and pointers in
pursuance to the budget announcement of the Hon’ble minister of finance providing for OTS for advances
up to Rs.50,000 in respect of NPAs of small/marginal farmers square measure being demanded.

Negotiating for compromise settlements;

The initial crucial step towards important NPA management is to simply accept that recoveries square
measure ones own responsibility. to stay the Banks in operation cycle going swimmingly, it's essential that
this realization of ones duties be reworked into deeds by resorting to varied strategies of recovery.of the
varied strategies out there for NPA Management, Compromise Settlements square measure the
mostattractive, if handled in an exceedingly skilled manner.

Advantages
1) Saves cash, time and manpower
Banks square measure in the main involved with recovery of dues, to the utmost doable extent, at
minimumexpense. By moving into compromise settlements, the target is achieved. Also, tons ofexecutive
time is saved as a result of most of the same old issues / delays related to court actionare avoided
 2) comes a useful image of the Bank
A well-concluded compromise settlement, which ends in an exceedingly ‘WIN-WIN’ for the
Bank further asthe receiver, may be a robust positive info for the Bank. The impression generated is that
theBank is capable not solely of sympathy, however conjointly sympathy

3) Expedites utilization of funds

Compromise settlements aim at fast recovery. Recovery suggests that funds changing into out
there forrecycling and, further interest generation

4) Cleanses Balance Sheet

With the FTO level happening, and therefore the further funds changing into out there for utilization asfresh
advances, the quality quality of the Bank is sure to go up. Improved quality quality signifieshigher profits by
reduced provisions and inflated interest financial gain. With additions to thereserves, the capital
position conjointly improves, up the Capital Adequacy position.Besides the on top of, compromise offers the
simplest possibility once,
i. The documents square measure defective and can't be corrected,
ii. ii. security isn't enforceable
iii. iii. sales agreement is very tough, or would result solely in realizing a paltry quantity and iv. The
borrowers become untraceable and recovery will be solely through guarantors.

Disadvantages

i. Compromise involves loss, since full recovery isn't doable. In fact, full recovery isn't even
envisaged, however sacrifice is.
ii. It should be viewed as a souvenir for default, particularly if chronic default cases square
measure settled by negotiations.
iii. It should have a demonstrative result, so might vitiate the culture of reimbursement
iv. There's conjointly the likelihood of misuse since assessment of state of affairs is
extremely subjective.
Practicle aspects of compromise settlements

Each compromise proposal must be checked out on an individual basis, evaluated strictly on deserves,
and negotiated properly for maximization of profit to the Bank. Hence, a straight jacket
approach isn't doable, neither is it fascinating, to allow strict pointers for compromise settlements.

Restructuring and Rehabilitation

A. Banks square measure liberated to style and implement their own policies for restructuring/
rehabilitation of the FTO accounts

B. Reschedulement of payment of interest and principal when considering the Debt service
coverage magnitude relation, contribution of the promoter and availableness of security
There are several methods where a banking institution can get to know about an performing asset changing
to non performing asset and sometimes helps in recovering the same

They can be classified into four types :

FINANCIAL

 When the term loan or other loan instalment is not being paid
 The current ratio is decreasing
 There are frequent cheque bounces
 When only the payment of principal is done without the interest amount
 The account activities are nil or low

ATTITUDE CHANGES

 Issue between the joint account holders or the parties involved in the loan
 Escaping from the eyes of bank officials
 Not surrendering to the calls made by the bank
 Going against the rules setup by the bank
 When the loan is used for personal things

PHYSICAL AND OPERTIONAL

 Not disclosing the information of stock to bank

 Frequent or undisclosed change in the plans/rules
 Salaries not being paid
 Providing false statements with regard to the business
 The effect that may arise due to the natural disasters like earthquake , landslide , storms , floods , etc
 Not providing the required details when demanded or as and whenever required

OTHER

 When the borrower escapes

 When the borrower dies
  When the business is going into losses
 Multiple loans not being paid as a result of bankruptcy
 Political influence
 Frequent changes in the policies by state and central government
 The competition among the similar players of the market

All the factors mentioned above may be certain or uncertain , as a result the performing asset getting
converted to a non performing asset is not predictable . Even the financial institutions cannot declare the
account reciavables or loans as non performing assets without any serious study or detailed information .
Someimes the payment of loan instalments maybe due because of various reasons . Specifically to mention :

Prolonged illness of the loan payer

Losses that arise during a specific period of time
Less stock due to no transportation during strikes or lockdowns
Temporary shutdown of plant , company or business due to reasons like machinery/ equipment breakdown

Hence the prediction of performing asset to non performing asset is tough as it can happen intentionally or
unintentionally .
The steps implemented to lower the level of NPAS

I. Internal Checks and management

Since high level of NPAs dampens the performance of the banks identification of
potential downside accounts and their shut observation assumes importance. tho' most banks have Early
Warning Systems (EWS) for identification of potential NPAs, the particular processes followed,
however, take issue from bank to bank. The EWS alter a bank to spot the recipient accounts that show
signs of credit deterioration and initiate remedial action. several banks have evolved Associate in
Nursingd adopted an elaborate EWS, that permits them to spot potential distress signals
and arrange their choices beforehand, consequently. the first warning signals, indicative of
potential issues within the accounts, viz. persistent irregularity in accounts, delays in union of interest,
frequent relegation of L/Cs, units' money issues, market connected issues. etc. area unit captured by the
system. additionally, a number of these banks area unit reviewing their exposure
to recipient accounts quarterly supported printed knowledge that additionally servi.s as a very
important further warning system.
These early warning signals utilized by banks area unit typically freelance of risk rating systems
and quality classification nouns prescribed by run. the key components/processes of a EWS followed by
banks in Republic of India as brought out by a study conducted by banking company of India at the
instance of the Board of monetary supervising area unit as follows:

 Designating Relationship Manager/ Credit Officer for observation accounts

 Preparation of 'know your client' profile
 Credit scoring system
 Identification of watch-list/special mention class accounts
 observation of early warning signals

2. Relationship Manager/Credit Officer

The connection Manager/Credit Officer is a political candidate United Nations agency is predicted to
own complete information of recipient, his business, his future plans, etc. the connection Manager needs
to detain constant bit with the recipient and report all developments impacting the borrowable account.
As a pan of this contact he's additionally expected to conduct scrutiny and activity inspections. within
the credit observation method, the responsibility of observation a company account is unconditional with
Relationship Manager/Credit Officer.

3. Know your client' profile (KYC)

Most banks in Asian country have a system of making ready 'know your client' (KYC) profile/credit
report. As a locality of 'KYC' system, visits area unit created on shoppers and their places of business
units. The frequency of such visits depends on the character and wishes of relationship.
4. Credit rating system

The credit rating system is basically one purpose indicator of a private credit exposure and is
employed to spot live and monitor the credit risk of individual proposal At the complete bank level,
credit scoring system allows pursuit the health of banks entire credit portfolio. Most banks in Asian
country have place in situ the system of internal credit rating. whereas most of the banks have developed
their own models, a number of banks have adopted credit rating models designed by rating agencies.
Credit rating models take into consideration numerous forms of risks viz money trade and management,
etc. related to a borrowable unit. The exercise is usually done at the time of sanction of
recent borrowable account and at the time of review renewal of existing credit fee dines.

5. Watch list/Special Mention class

The grading of the bank's risk qualities is a very important control tool It serves the requirement of the
Management to spot and monitor potential risks of a loan asset. the aim of identification of potential
NPAs is to confirm that acceptable preventive corrective steps may well be initiated by the bank to
safeguard against the loan quality changing into non-performing. Most of the banks have a system to
place bound borrowable accounts underneath watch list or special
mention class if acting advances operational underneath adverse business or economic conditions arc
exhibiting bound distress signals. These accounts typically exhibit weaknesses that area
unit correctable however warrant banks' nearer
into non acting advances.
Early Warning Signals it's necessary in any early warning system, to be sensitive to signals of credit
deterioration. a number of early warning signals area unit utilized by completely different banks for
identification of potential NPAs. Most banks in Asian country have set down a series of operational,
financial, transactional indicators that would serve to spot rising issues in credit exposures at Associate
in Nursing early stage. Further. it's disclosed that the symptoms which can trigger early wanting
system rely not solely on default in payment of installments and
interest however additionally different factors like deterioration
APPLICATION OF THEORETICAL FRAMEWORK

The classification of loans within the Republic of India bank loans area unit on the subsequent basis :
Performing Asset: Loans wherever the interest or the principal don't seem to be due on the far side a hundred
and eighty days at the tip of the yr.
Non-Performing assets : Any loan reimbursement, that is due on the far side a hundred and eighty days or 2
quarters, is considered as non performing assets .
consistent with the securitization and re construction of monetary assets and social control of stake
Ordinance , 2002 “non-performing assets” (NPA) suggests that “an asset or a/c of a receiver,
that has been classified by a bank or institution as sub-standard, uncertain or loss quality, in accordance with
the directions or tips about asset classification issued by the banking company.

Asset classification
Assets will be classified into Four classes particularly
(1) normal
(2) Sub -Standard
(3) uncertain
(4) Loss the last 3 classes are classified as NPAs supported the amount for which the quality has remained
non-performing and therefore the realisability of the dues.

1. Normal assets: The loan accounts that ar regular

and don't carry over traditional risk. among normal assets, there might
be accounts that although haven't become New People's Army however ar irregular.
Such accounts ar known as as special Mention accounts.

2. Sub-Standard Assets: With result from thirty one.3.2005, a sub- normal quality is one, that is
classed as New People's Army for a amount not olympian twelve Months (earlier it absolutely
was eighteen months). In such cases, the present internet value of the borrower/ warrantor or the
present value of the protection charged isn't enough to make sure recovery of the dues to the
bank fully. In alternative words, such associate degree quality can have well outlined credit
weakness that jeopardize the liquidation of the debt and ar characterised by the distinct risk that
the banks can sustain some loss, if deficiencies aren't corrected.

3. Uncertain Assets: With result from thirty one march 2005, associate degree quality is to be
classified as uncertain, if it's remained New People's Army or sub normal for
a amount olympian twelve months (earlier it absolutely was eighteen months). A loan classified
as uncertain has all the weaknesses inherent in assets that were classified as sub-standard, with
the value-added characteristic that the weakness build assortment or liquidation fully,- on the
premise of presently acknowledged facts, conditions and values- extremely questionable
and inconceivable.
4. Loss quality: A loss asset is one wherever loss has been known by the bank or internal or
external auditors or the tally examination however the quantity has not been written
off altogether. In alternative words, such associate degree quality is taken into account bad and of
such very little price that its continuance as a bankable quality isn't bonded though there could
also be some salvage or recoverable price. When a Sub normal account is classed as uncertain or
Loss while not looking ahead to twelve months: If the realizable price of tangible security during
a sub normal account that was secured falls below10% of the outstanding, it ought to be
classified loss quality while not looking ahead to twelve months and if the realizable price of
security is 100% or higher than however below five hundredth of the outstanding, it ought to be
classified as uncertain no matter the amount that it's remained NPA
Research Operations

1. Significance of the study

The most aim of a person is that the utilization of cash within the best manner since the Asian
country is country wherever over half population has drawback of running the family within
the best manner. but Indian folks aged sizable amount of drawback until the event of full-fledged
banking sector. The Indian banking sector came into the developing nature principally once the1991
government policy. The banking sector has very helped the Indian folks to utilize the
only cash within the best manner as they require.

The banks not solely settle for the deposits of the folks however conjointly give them credit
facility for his or her development. Indian banking sector has the state in developing the business and
repair sectors. however recently the banks face the matter of credit risk. it's found that a lot
of general folks and business folks borrow from the banks however because
of some real or alternative reasons don't seem to be ready to repay back is thought because
the non acting assets. several banks face the matter of foreign terrorist organization that hampers the
business of banks. because of NPAs the financial gain of the banks is reduced and also
the banks ought to create the massive range of the provisions that will curtail the profit of the banks
and because of that the money performance of wouldn't show sensible results the most aim
behind creating this report is to grasp however SBP is working its business and the way NPAs play
its role to the operations of the SBP bank.

My study is additionally focusing upon existing system in Asian country to unravel the matter of
NPAs and comparative analysis to know that bank is taking part in what role with involved to NPAs.
Thus, the study would facilitate the choice maker to know the money performance and growth of
the involved banks as compared to the NPAs.

2. Objective of the study

The objectives of my study measure are as following: to grasp that is best in terms of NPAs
from each the banks of ICICI

To know what's Non perf. Assets and measure the underlying reasons for the emergence of the
NPAs.

To know the impacts of NPAs on the operations of the Bank .

To grasp what steps impact measure being taken by the Indian banking sector to scale back the
NPAs?
To measure the comparative ratios of the ICICI bank .

To learn why NPAs are challenging to Banks.

To know the that means & nature of NPAs.

 To review the overall reasons for assets become NPAs.

What are the best methods adodpted by rbi to look after the management of npa

3. Need of the Study

Following sort of want arises for this study:

To review what quite role NPAs square measure taking part in upon the operations of the Bank.

To grasp the variables on the market to regulate NPAs.

The requirement conjointly has been felt to review the money performance of SBP bank.

4. Scope of the Study

The scope of the study is as given below:

Banks will improve their money position or will increase their financial gain from credits with the
assistance of this project.

This project will be used for comparison the performance of the bank with others. this will even
be applicable to grasp the explanations of increase in NPAs.

This project conjointly provides come across Impact of NPAs thought of NPAs will be created clear.
To gift an image of movement of npas in ICICI Bank

5. Limitations of the study

Access to the in depth information of banks data

Meeting the concerned officials of the bank to gather the data

Visiting the bank on a frequent basis

Some of the data is secondary based to arrive at the calculations ,which makes me feel that the
results may not be soo accurate or appropriate

Time constraint due to traffic and the location

RESEARCH METHODOLOGY

Research refers to go looking for data. One may also outline analysis as a scientific and
systematic adventure story for pertinent info on a particular topic. it's AN art of scientific investigation.

Research Methodology

The analysis methodology could be a systematic manner of finding out the analysis drawback.
The analysis methodology means that the manner within which we will complete our prospected task.
Before endeavor any task it becomes terribly essential for anyone to work out the matter of study. I even
have adopted the subsequent procedure in finishing my report study.

1. Analysis drawback.
2. Analysis style.
3. Deciding the information sources.
4. Analyzing the information.
5. Interpretation.
6. Getting ready analysis report.

(1) Analysis drawback

I am curious about Finance and that i need to form my future in it. So. I even have set to
form my analysis study on the banking sector (NPAs). Providing Credit facility to the recipient is one in
all the vital factors as way as banking sector is bothered. As my coaching is at bank I even have got the
project upon Non playing Assets the nice challenge before the banks. this can be my drawback to be
studied.

(2) Analysis style

The analysis style tells concerning the mode with that the whole project is ready. My analysis style for
this study is essentially analytical. as a result of I even have utilised the massive range of information of
the banking sector. during this project theoretical study is additionally tried.

(3) Deciding the information supply

The data supply is primary or secondary. the first knowledge area unit those knowledge that area
unit used for the primary time within the study. but such knowledge come about a lot of time
and are pricy. Whereas the secondary knowledge area unit those knowledge that area
unit already obtainable within the market these knowledge area unit straightforward to go
looking and don't seem to be pricy too. For my study I even have utilised nearly all the
secondary knowledge .But somehow I even have conjointly used primary knowledge in form of
interviews.

(4) Tools used for analysis of information

The data collected were analyzed with the assistance of applied math tools like magnitude
relation analysis, and analysis. Tables area unit wont to represent the consolidated knowledge.
Graphical illustration is additionally used for higher comprehension & presentation

(5) Analyzing the information

The Primary or secondary knowledge each would ne'er be helpful till they're altered and studied
or analyzed. once the person receives several unuseful data would even be there. So, I analyzed the
information and altered it and turned it within the helpful manner thus, that it will become helpful in my
report study.

(6) Interpretation of the information

With the utilization of analyzed knowledge I managed to organize my project report. however analyzing
of the information wouldn't facilitate my study to succeed in towards its objectives. The interpretation
of the information is needed so the others will perceive the Crux of the study in
additional straightforward manner with none drawback thus I even have supplemental the chapter of
study that may make a case for others to grasp my study in easier manner.

(7) Project Writing

This is the last step in getting ready the project report. the target of the report writing was to report the
findings of the study to the involved authorities. And to connect all the wants along with your report.
 CHAPTER 5

ANALYSIS
AND
INTERPRETATION
Ratio Analysis

The relationship between 2 connected things or related items of economic statement is

thought as magnitude relation or ratio . A magnitude relation or ratio is simply one variety expressed in
terms of another. The magnitude relation is usually expressed in 3 alternative ways. it's going to be
expressed as a proportion between the 2 figures. Second it's going to be expressed in terms of proportion.
Third, it's going to be expressed in terms of rates.

The use of magnitude relation or ratio has become progressively fashionable throughout the previous couple
of years solely. Originally, the bankers used the present magnitude relation to guage the capability of the
borrowing business enterprises to repay the loan and create regular interest payments. these
days it's assumed to be necessary tool that anybody connected with the business turns to magnitude
relation for measure the monetary strength and earning capability of the business.

For concluding the results of npa I have used 5 types of ratios as mentioned below

1. Gross NPA
2. Net NPA
3. Provision NPA
4. Problem Asset
5. Capital Adequancy
1. Gross Non Performing Asset Ratio

This is the ratio which is related to gross npa with that of gross advances to the bank .

Gross non performing assets is the total sum of loaned assets which are classisfied as npa as per the
rules and regulations of RBI .

This ratio has to be counted through percentage and the formula for same is as follows

GNPA ratio = GROSS NPA

X 100
GROSS ADVANCES

Gross non performing assets of ICICI BANK = 46291 CRORES

Gross advances of ICICI BANK = 564307 CRORES

Gross GPA ratio will be 6.77%

Interpretation :

We can get to know the credit portfolio of ICICI BANK.

If gnpa is high , the portfolio will be less
Fom the above table we can conclude that gross non performing asset ratio is 6.77%
 GROSS NPA RATIO %
8

0
ICICI BANK AXIS BANK

GROSS NPA RATIO %

NAME OF THE BANK GROSS NPA RATIO

ICICI BANK 6.7%

AXIS BANK 5.26%

 2. Net Non Performing Asset Ratio

This is the ratio which is related to ratio of npa to the advances , in which provision is to be subtracted
From the gross advance
It is advised to make provision in npa account
This makes the calculation and findings easier

This ratio has to be counted through percentage and the formula for same is as follows

NNPA = GROSS NPA - PROVISIONS X 100

GROSS ADVANCES – PROVISONS

Net non performing assets of ICICI BANK = 13577 CRORES

Net advances of ICICI BANK = 564307 CRORES

Net GPA ratio will be 2.6%

Interpretation :

The quality of npa in ICICI BANK can be known

The higher the nnpa the lower the portfolio of credit and way around From the above calculation ,
we can conclude that net non performing asset ratio is 2.6%
 NET NPA RATIO %
3

2.5

1.5

0.5

0
ICICI BANK AXIS BANK

NET NPA RATIO %

NAME OF THE BANK NET NPA RATIO %

ICICI BANK 2.6

AXIS BANK 2.05

 3. Problem Asset Ratio

This is the ratio which is related to ratio of gross non performing asset of or by the bank
It gives a glimpse after arriving at a profit percentage

This ratio has to be counted through percentage and the formula for same is as follows

Problem Asset Ratio = Gross NPA X 100

TOTAL ASSETS

Gross non performing assets of ICICI BANK = 51591 CRORES

Total Assets of ICICI BANK = 1177498 CRORES

Problem Asset ratio will be 4.38%

Interpretation :

Return on asset and liquidity risk managements is related to this ratio

The higher the problem asset ratio the higher will be the liquidity and lower credit portfolio
From the above calculation we can conclude that the problem asset ratio is 4.38%
 PROBLEM ASSET RATIO
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
ICICI BANK AXIS BANK

PROBLEM ASSET RATIO

NAME OF THE BANK PROBLEM ASSET RATIO %

ICICI BANK 4.38%
AXIS BANK 2.52%
 4. Provision Ratio

This is the ratio which is related to ratio of total prov. Held for npa to the gross npa of bank

Each and every bank must make a provision to meet the uncertainities of non performing assets in
future period of time

This always has an adverse effect on the gross profit of the banks

This ratio has to be counted through percentage and the formula for same is as follows

Provision Ratio = Total Provisions

X 100
Gross NPA

Total Provisions of ICICI BANK = 19661 CRORES

Gross npa of ICICI BANK = 46291 CRORES

Provision ratio will be 42%

Interpretation :

This ratio is calculated to depict the safety measure adopted by the banks
It affects the profitability , safety and dividends of the sholders
If the ratio is high , the provisions made by bank will be high
From the above calculation we can conclude that the problem asset ratio is 42%
 PROVISION RATIO
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
ICICI BANK AXIS BANK

PROVISION RATIO

NAME OF THE BANK PROVISION RATIO

ICICI BANK 42%
AXIS BANK 27%
 5. Capital Adequacy Ratio

This is the ratio which is related to ratio of capital of the bank to its assets
Later they are weighted or adjusted as per the risk attached

This ratio has to be counted through percentage and the formula for same is as follows

Capital Adequacy Ratio = Capital

X 100
Risk Weighted Assets

Total Capital of ICICI BANK= 1288 CRORES

Risk Weighted Assets of ICICI BANK = CRORES

Capital Adequancy ratio will be 0.18%

Interpretation :

The compensation of non performing assets is done by creating the capital reserve
The higher the capital adequacy ratio the better the bank in terms of creating capital reserve
From the above calculation we can conclude that the capital adequancy ratio is 0.18%
 CAPITAL ADEQUACY RATIO %
0.2
0.18
0.16
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
ICICI BANK AXIS BANK

CAPITAL ADEQUACY RATIO %

ICICI BANK COMPARED WITH AXIS BANK

I have compared the data with regard to non performing assets between two banks i.e ICICI Bank and
AXIS Bank to arrive at a better decision . This not just helped me arrive at a better decision making but
also gave me a clear understanding as to how ICICI bank is major player in the industry when it comes
to the non performing assets .

The reasons for comparing two or more banks :

 One can also get a good understanding and knowledge when looked into the graph or the ratios

 It is easy to view

 The analysis becomes easy

 The comparison has a wider approach

 The study becomes interesting and detailed

 The items covered will be vast

 The result derived can be compared and evaluated

 The interpretation becomes easier

 The conclusion can be done easily

CHAPTER 6

LEARNING
EXPERIENCE
THE POLICIES FOR NPA MANAGEMENT AND ITS OBJECTIVES

 The main objective is to reduce, decrease or bring down gross npa ratio to less than 5%

 The next objective was to reduce , decrease or bring down net npa to less than 1.75%

 Prepare a policy to exit way for low or week standard assets way before they turn non performing

 Creation of stressed asset mgmt. grp has resulted in increase focus on high level npa

 The details of rephrasement , writeoff or recourse to arcil or cdr bodies

 There should be several targets for recovering the performing assets

 The packages must be implented on timely basis for better utilisation

 Reduce the risk of performing assets turning into non performing assets
THE SOLUTIONS FOR THE OBJECTIVES ARE AS FOLLOWS

Don't Eliminate — Manage

Studies have shown that management of NPAs instead of elimination is prudent. India's rate and bank
spreads square measure above western nations. As a result we are able to support a non-zero level of
NPAs that balances the chance vis-a-vis come acceptable to the Indian context.

Effectiveness of ARCs
Concerns are raised regarding their connectedness to Republic of India. a major share of the NPAs of the
PSB's square measure within the priority sector. Loans geographic region are troublesome to gather and
Banks by virtue of their sheer reach arc higher placed to recover these loans. Lok Adalats and Debt
Recovery judicature measure different effective mechanism to handle this task. ARCs ought to specialize
in larger borrowers. Further, there's a necessity for personal sector and foreign participation within
the ARC. non-public parties can look to active resolution of the matter and not just regard t as book group
action. Moving NPAs does not get eliminate the matter in China; Potential investors square
measure still troubled regarding the risks of non social control of the possession Rights of the assets they
purchase from the ARCs. Action and measures have to be compelled to be taken to
create capitalist confidence.

Well Developed Capital Markets

Numerous papers have stressed the criticality of a well developed capital market within
the restructuring method. A capital market brings liquidity and a mechanism for write off of loans. while
not this a bank could obtain to table banking organization drawback for of capital adequacy issues and resort
to techniques like ever greening. Monitor by bond holder is healthier as they need no motive to
sustain wasteful activity. Further, the banks will manage credit risk higher because it is less complicated to
sell or securitize loans and discuss credit derivates. Indian debt market is
comparatively underneath developed and a spotlight ought to be centered on building liquidity and volumes.

Contextual making decision process

Regulations should incorporate a discourse perspective (like temporary income problems)
and shoppers ought to be handled during a manner that reflects true price of their assets and future to
pay. the highest management ought to delegate authority and back choices of this sort taken b middle level
managers.
FINDINGS OF THE STUDY

 ICICI bank is the top most player in India with highest non
performing assets level

 ICICI bank shows higher gross non performing assets ratio as

compared to AXIS bank by 1.34%

 ICICI bank shows higher net non performing assets ratio as

compared to AXIS bank by 0.55%

 As per this study it can be concluded that there is a rise in the

level of non performing assets due to the government
regulations

 The provisioning level of ICICI is better than that of AXIS bank

 The level of risk profile in ICICI bank is low when referred to

that of AXIS bank
RECOMMENDATIONS AND SUGGESTIONS WITH REGARD TO BANK

 The two banks should have the own credit rating agency to
know and evaluate the net worth and capacity of the loan
seeker

 The management of bank must be stressed to be effective

 The conversion of performing to non performing must be

prevented or stopped by identifying the problems

 There should be regular checking procedure

 The credits must always be prioritized by securitization

 The financial conditions must be checked every now and then

 The provisioning policy must be prepared accordingly

 The banks must make a thorough analysis of the swot that can
be taken up by the borrowing firm of the company or the
individual

 Most efforts should be done to recover the non performing

assets
CONCLUSION

A report is said to be incomplete until the conclusion part is not mentioned or declared .
The conclusion tells us what has been covered in the study and the method of study
As per this report I conclude the following things

 NPA s have been the biggest challenge to the banks

 The banks in india whether private or public are trying to help the various sectors like service ,
production and business

 They not only accept the deposits but also lend credit facilities tom the needy

 The bamks are playing an important role in developing the economy of our country

 ICICI bank seems to be the best bank with regard to non performing assets as it is high when it
comes to non performing asset level

 The biggest problem that can be found is the conversion of performing assets into non performing
assets

 The wrong management of non performing assets can hinder the performance of the bank and affect
the smooth functioning of bank

 The npas are increasing year to year and are a potential threat to the banks

 Non performing assets depict high level risk and low level credit portfolio

 The right measures should be adopted to eradicate the asset becoming doubtful to recover

 ICICI bank has better ratios as compared to axis bank

 If the performing assets are maintained properly , the profits of the bank can increase drastically
CHAPTER 7

BIBLIOGRAPHY
BIBLIOGRAPHY

 Financial express

 Basel website

 www.indiainfoline.com

 www.rbi.com

 www.icici.com

 Wikipedia
QUESTIONNAIRE ON NPA

1. In one line what's NPA ?

a. Once associate degree quality ceases to get financial gain for the bank
b. If the purchasers don't pay principal and interest for an explicit amount of your time (90 days) ,it will
be referred to as as NPA, 1E1
c. If periodical financial gain isn't generated for loaner of cash,it is referred to as as
NPA

2. What is the proportion (%) of NPA in your specific branch ?

a) 1-4%
b) 4-7%
c) 7-10%
d) 10%&above

3. What's trend of NPA in your bank ?

a) extremely decreasing
b) Slowly decreasing
c) Constant
d) Slowly increasing
e) extremely increasing

4. Antecedently associate degree quality be referred to as NPA once one hundred

eighty days, however currently it's being modified to ninety days in Indian context .do you believe it ?
Yes
No

5. NPA group is classified as

a) Standard
b) Sub standard
c) Doubtful
d) Loss
6. What reasons measure the explanations for turning into non performing asset ?
a) Social control deficiencies throughout work
b) Lack of data of the world of handling
c) Lack of timely actions
d) Lack of adequate efforts for recovery
e) Lack of correct verification of the real purpose of loans and advances

7 . What square measure the various advances treated as non playacting ?

a) Agricultural loans
b) Non agricultural loans
c) money credit
d) Over drafts
e) Term loans zero housing loan

8. Do you have similar recovery strategy all told sectors and all told realms ?
Yes
No

9. Do you assume there are the choice ways in which to scale back the npa ?
a) Correct appraisal before disposal
b) To scale back unsecured loans political recommendations mustn't be inspired
c) Disposal at low rate of interest to farmers so compensation is formed straightforward

Yes
No
10 . Does one assume factors contribute to npa ?

Internal factors
1. Defective disposal method
2. Inappropriate technology
3. Poor credit appraisal system
4. Social control deficiencies

External factors
1. Willful Defaults
2. Industrial illness
3. Lack of demand
4. Amendment on Govt. policies

Yes
No