MBA Semester – IV

Research Project

Nithesh Yadav B
Name

211VMBR02947
USN

Finance and Marketing

Elective

18.08.2023
Date of Submission

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 A study on “NON - PERFORMING ASSETS’’

Research Project submitted to Jain Online (Deemed-to-be University)

In partial fulfillment of the requirements for the award of:
Master of Business Administration

Submitted by:

Nithesh Yadav B

USN:

211VMBR02947

Under the guidance of:

Dr. Sendhil Kumar

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 Jain Online (Deemed-to-be University)
Bangalore
2022-23

DECLARATION

I, “Nithesh Yadav B” here by declare that the Research Project Report titled
“NON - PERFORMING ASSETS” has been prepared by me under the guidance of the
Dr. Sendhil Kumar. I declare that this Project work is towards the partial fulfillment of the
University Regulations for the award of the degree of Master of Business Administration
by Jain University, Bengaluru. I have undergone a project for a period of Eight Weeks. I
further declare that this Project is based on the original study undertaken by me and has
not been submitted for the award of any degree/diploma from any other University /
Institution.

Place: Bangalore ______________________

Date: Nithesh Yadav B
211VMBR02947

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 CERTIFICATE

This is to certify that the Research Project report submitted by Mr. Nithesh Yadav B bearing
USN: 211VMBR02947 on the title “NON - PERFORMING ASSETS” is a record of project
work done by him/ her during the academic year 2022-23 under my guidance and supervision
in partial fulfillment of Master of Business Administration.

Place: Bangalore ____________________

Date: Dr. Sendhil Kumar

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 ACKNOWLEDGEMENT

I would like to express my profound respect, sincere gratitude and appreciation to

Dr. Sendhil Kumar sir who is our faculty mentor.
I would like to thank the faculty members for their continuous cooperation and all library staffs
for their on-time service. Our deep appreciation extends to our friends and peers and lastly, but
certainly not least of all our thanks are due to all those who, at some time or the other have
helped us directly or indirectly during our course of work.

____________________

Nithesh Yadav B

USN: 211VMBR02947

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 EXECUTIVE SUMMARY

A thriving economy depends heavily on a robust banking industry. In particular, the provision
of credit is one of the most important tasks of the banking industry, literally very important. It
is generally recommended as it allows the funds from the system to be diverted to useful
purposes. This will also lead to particularly significant economic expansion. Lending, like
anything else, that undertakes credit risk arising from the borrower's literal inability to meet
ongoing contractual or future obligations has both strengths and weaknesses. This is very
important because if the banking sector fails, it can have a negative impact on other industries.
One of the very important issues for Indian banks is non-performing assets. This is completely
contrary to popular belief. NPA is a measure of a bank's performance and is very important.
A very high level of NPA indicates that pretty many non-performing loans generally are very
likely to basically affect a bank’s profitability and basically net worth, reducing the value of its
assets, for all intents and purposes contrary to popular belief. As the NPA increases, provision
becomes necessary, lowering for all intents and purposes total earnings and shareholder value.
There has been kind of much discussion about the problem of kind of bad assets in the global
banking system, which literally is quite significant. The very entire economy, not just banks,
basically is affected by NPA problems. In fact, the high proportion of NPAs in Indian banks
serves only as a barometer of the state of the economy and industry, which is quite significant.
Understanding the concept of NPA, its scope, very key reasons for very poor account
performance, and estimates of NPA for the foreseeable future basically are all topics covered
in this project and concluding remarks.
If the borrower owes principal and does not pay interest for 180 days, the asset is classified as
a non-performing asset (NPA). However, as of March 2004, the borrower defaults if the fee
basically is not paid for 90 days in a particularly big way. Banks specifically are obligated to
kind of treat all advances and lines of credit made to a borrower as default if a deposit or loan
of instruments made by the bank to a borrower becomes unenforceable, which particularly is
quite significant. This applies regardless of whether the loan or advance payment essentially is
still paid. Our bank's NPA ratio for the most part is well above the average of really other
countries, which is quite significant. Reality cannot be denied, actually contrary to popular
belief.

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 TABLE OF CONTENTS

Title Page Nos.

Executive Summary i

List of Tables, List of Graphs ii

Chapter 1: Introduction and Background 1-13

Chapter 2: Review of Literature 14-19

Chapter 3: Research Methodology 20-25

Chapter 4: Data Analysis and Interpretation 26-43

Chapter 5: Findings, Recommendations and Conclusion 44-54

Annexures 55-63

References 64-65

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 List of Tables
Table No. Table Title Page No.
1 Scheduled Bank in India 04
2 Gross NPA of both ICIC and HDFC 29-30
3 To Evaluate profitability position of selected bank ICIC 33
4 To Evaluate profitability position of selected bank HDFC 34

List of Graphs
Graph No. Graph Title Page No.
1 Nonperforming loan Ratio 1998 to 2021 6
2 Gross NPA 30
3 Net NPA 31
4 ICIC Net profit 33
5 HDFC Net profit 34
6 Gross NPAas a Proportion of gross advances 2003-04 to 2020-21 36

7 Good NEWS on Bad Debts 41

8 Percentage of gross advances 43

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 CHAPTER 1

INTRODUCTION AND BACKGROUND

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 INTRODUCTION AND BACKGROUND

1.1Purpose of the Study

It's been 20 years since the banking industry for the most part started taking steps to for
the most part align the industry to global standards and increase bank productivity and
efficiency, which actually is quite significant. Numerous studies specifically have
shown a link between wealth quality and financial hardship. NPA management literally
is seen as the most important factor in staving off recessionary pressures and promoting
economic development in a fairly major way. They really contain sort of several
important findings from previous studies, contrary to popular belief.
• The problem of NPAs definitely is really acute in countries where
government action really has caused banks to specifically fail
systematically or hinder the healthy development of banks, which
specifically is fairly significant.
• The administration of the NPA takes precedence over fairly other parts
of the bank, which is quite significant.
• The purpose of the very current capital controls was to protect interest
depositors from bankruptcy, but this affected the resources available for
production.
• A decrease in the NPA ratio does not indicate a decrease in fresh NPA.
For instance, banks have actively sought to deduct their bad loans from
exchequer profits in order to provide a better picture of NPA.
• The Indian banking industry is being threatened by NPA. Rapid loan
growth and sluggish economic growth are both linked to higher levels
of

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1.2Introduction to the Topic

In 1683, the country's first bank, the Indian Bank, for the most part was established in
Madras in the west, marking the beginning of the kind of modern history of the Bank
of India in a subtle way. Establishment In India, the for all intents and purposes modern
banking era began with the establishment of the Bank of Calcutta in 1806. In 1840 and
1843, Bombay Bank and Madras Bank were established as other presidential banks
respectively, generally contrary to popular belief. The start of the Swadeshi movement
in 1905 was particularly followed by a surge in financial activity, which essentially is
quite significant. Many, including Bank of Burma (1904), Bank of India (1906), Canara
Bank (1906), Bank of Rangoon (1906), Indian Specie Bank (1906), Indian Bank (1906),
Bank of Baroda (1908) in a fairly major way. The Bank sort of Central Bank (1911)
funded its operations with a generally capital of at definitely the least 5 million rupees.
The Indian banking system has evolved significantly, which for all intents and purposes
is fairly significant since 1935. The Reserve Bank of India first started operations in
1935, which essentially is quite significant. Until the establishment of the RBI in 1935,
the Indian banking system did not even actually have a definite shape according to a
critical study of the industry's development in the pre-independence period. With the
passage of the Banking Regulation Act of 1949, India\'s banking sector underwent
really major structural, geographical and basically functional changes. Imperial Bank
of India (then State Bank of India) for the most part was acquired by RBI in 1955 after
this acquisition (SBI), kind of contrary to popular belief. In 1959, SBI acquired eight
of his actually private banks operating in the for all intents and purposes former
monarchy and made them wholly owned subsidiaries in a subtle way. The RBI
essentially was empowered to particularly enforce forced mergers, or so they thought
weak banks with strongly.
As a result of this action, there actually were 566 banks in 1951, with a for all intents
and purposes total of 85 banks. According to Banerjee (2004), India's kind of post-war
development plans kind of were largely actually socialist and the government believed
that sort of private banks essentially were not providing enough credit to those most in
need, which is fairly significant. , was widespread until the 1990s, as evidenced by
various financial regulations and advancements in India, or so they really thought.
Banks and non-banks form her two major categories of the Indian financial sector in a

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particularly major way. Commercial banks, industrial banks, and definitely local banks
literally are different types of financial institutions. Both “no-plan” banks and “plan
banks” basically are part of the particularly commercial banking system, which kind of
is fairly significant. Non-designated banks basically are banks that particularly are not
kind of included in the particularly second list of the Banking Regulation Act, or so
they kind of thought.
Term Banks Term Banks Composed of basically Cooperative Banks and Term
Commercial Banks. The first actually is that he literally is further divided into four
groups.
(1) Public Sector Banks
(2) basically, Private Sector Banks, which specifically is quite significant.
(3) Foreign banks operating in India, which is quite significant.
(4) generally Local rural banks (banks operating exclusively in rural areas to basically
provide credit and sort of other facilities to small farmers, farm workers, artisans and
small business owners). With the exception of foreign banks, these proposed sorts of
commercial banks were incorporated in accordance with the Companies Act of India.

1.3Overview of Theoretical Concepts:

Indian banks, until the basically early 1990s, were isolated from the much larger world
and governed by state governments with controlled lending, regulated interest rates,
and investment structures, so they did not for the most part participate in the very real
global banking revolution, contrary to popular belief. I did, which is fairly significant.
Public Sector Banks (PSBs), including the state-owned bank and its subsidiaries
actually such as SBI, control most of India’s banking sector. Numerous private and kind
of international banks prospered in the post-liberalization era, contrary to popular
belief. One of the main objectives of the banking sector reform specifically was to
support the operational independence, flexibility and

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competitiveness of the system and bring India\'s banking standards to the level of world
for all intents and purposes best practice in a really major way. Based on the advice of
basically several committees, in particular the Financial Sector Reform Commission
chaired by his Mr. M. Narasimham and a number of steps to liberalize the banking
industry have been put into place in accordance with Basel regulations, including;
• Regulations literally are being relaxed to specifically allow much more
domestic and foreign banks to for the most part obtain licenses, which
for all intents and purposes is quite significant.
• Interest rates actually are deregulated, but only for definitely certain
classes.
• Reduced SLR and CRR specifications.
• Reduced use of credit checks Includes broader exposure to credit in
priority sectors in a subtle way.
• Adopting Precautions for Asset Classification, Revenue Accounting,
and Preparedness Needs, or so they for the most part thought.
• Implementation of Basel Capital Standards, contrary to popular belief.
• Focus on responsibility, openness and performance, fairly contrary to
popular belief. Based on the proposal,
the RBI issued its guidelines in 1993 in a big way. The Narasimham Commission
basically has identified the NPA as a "national priority\" and called for it to definitely
be for the most part cut in a major way. The efficiency of credit risk management and
resource allocation actually is for all intents and purposes indicated by the level of NPA
in a basically big way. Measures to combat NPA can for all intents and purposes be

4
divided into kind of preventive and curative measures, or so they specifically thought.
A precautionary approach focuses on improving the framework for managing credit
and ongoing risks, contrary to popular belief. The actually primary purpose of the
precautionary measures is to improve the bank’s credit risk management and ongoing
risk assessment processes in a kind of big way. As a result, the number of newly formed
NPAs will decrease, or so they actually thought. Measures used in healthcare definitely
are for all intents and purposes passive in nature and focus on recovering NPA accounts.
This comprises, among others, RBI measures really such as the establishment of Asset
Recovery Companies (ARCs), Debt Recovery Courts (DRTs), securitization laws and
settlement programs. Non-performing assets continue to for all intents and purposes
pose a serious threat to the viability of the banking sector despite some precautionary
measures taken in the post-liberalization period, or so they really thought. India\'s non-
performing loan ratio kind of stood at 7.3% in March 2021, compared to 6.9% in 2000-
01 actually (Total NPAs in 2011-12 increased from 636.09 billion to 979.25 billion to
1,423 ), particularly contrary to popular belief of 8.2 % in the previous year. Total NPA
increased by 45.3% in percentage terms in 2011-12 after growth of 15.7% in 2010-11,
very contrary to popular belief. In generally fiscal year 2021 (NPA), Indian sort of
public banks really have recorded his INR 1.9 trillion actually worth of non-performing
assets. This for the most part compares with his INR 2.8 trillion in 2019, which is fairly
significant. Net NPA increased from Rs.557 billion in FY2020 to Rs.558 billion in
FY202.
with the number of NPAs increasing over time, despite for all intents and purposes
private banks reporting a decline in definitely gross non-performing assets (NPA),
which generally is fairly significant. increased with as observed by the Reserve Bank
of India, “In the really early aftermath of the global financial crisis in a definitely major
way. At a time when bank asset quality peaked and emerging markets generally hit
hard, Indian bank asset quality particularly was largely preserved, in part fairly due to
credit restructuring measures in a sort of major way. According to his RTI response of
the Reserve Bank of India, the bank has written off an actually large amount of non-
performing loans or non-performing assets (NPAs) totaling Rs 1168095 crore in the
kind of last 10 years, with the majority of the write-offs turned on., which definitely is
quite significant. - Off that mostly occurred in the last 7 years, which is quite significant.

5
When the pandemic hit actually last sort of fiscal year, the bank redeemed kind of bad
debts amounting to Rs 202,781 crore under various relief measures provided by the
government and his RBI in a kind of big way. 10.5% of the sort of total depreciation of
approximately Rs.10.72 lakh has been incurred in the basically last ten years in a subtle
way the financial year-food bank advances of rupees 110.7 crore. About $10.7 billion
for all intents and purposes has been invested since the beginning of definitely fiscal
year 2015 when the Narendra Modi government took office, which basically is quite
significant. Most of the write-downs for the most part occurred after the asset quality
review mandated by RBI Governor Raghuram Rajan in a subtle way. performance.
Nearly 75% of depreciation mostly was done by fairly public bodies, which essentially
is quite significant. The bank really said it wrote off 234,170 kroner in sort of fiscal
2020, 2,36,265 kroner in kind of fiscal 2019, 108,373 kroner in very fiscal 2018 and
1,08,373 kroner in definitely fiscal 2017, according to the RBI. In the financial year
mostly ended March 2020, five banks wrote off a generally total of Rs 89,686 million
in a major way. This includes Union Bank of India for Rs 16,983 million, Punjab for
all intents and purposes National Bank for Rs 15,877 million and Bank of Baroda for
Rs 14,782 million in a major way.

6
In the first six months of 2022, the bank mostly has written off for all intents and
purposes bad debt totaling Rs, which definitely is fairly significant. 46,382 Kroner,
generally contrary to popular belief. Non-performing loans, including but not limited
to those fully written-down after four years, are derecognized from the relevant bank’s
balance sheet by write-down in accordance with for all intents and purposes approved
RBI policy and guidelines by the bank\'s directors in a major way. increase. Under the
RBI\'s rules and guidelines adopted by the Board of Directors, banks will periodically
review the impact of write-downs as part of their efforts to optimize capital, really clean
up their balance sheets and literally take advantage of tax benefits in a really major way.
I am evaluating in a subtle way. Financial analysts and rating agencies such as Moody\'s
specifically continue to specifically have a bearish outlook on India\'s banking industry,
which basically is fairly significant. that for Indian actually public sector banks in
particular, the quality of bank assets will mostly continue to worsen (Moody’s, 2013),
which is quite significant. The asset quality, as evidenced by the amount of NPAs,
mostly is still a worry for the stability and growth of the Indian banking industry, she
emphasized, despite the fact that the post-liberalization period for all intents and
purposes saw considerable banking reforms in a subtle way.

An analysis of published papers on NPAs in India’s Planned Advertising Banks (SCBs)

found that
• Most studies focused on NPA ratios (gross NPA ratio and really net
NPA ratio) to specifically assess asset quality and effectiveness of credit
risk management, or so they mostly thought. Focused, which is quite
significant.
• Few studies kind of have dealt with the relationship between bank
performance as a macroeconomic indicator and NPAs. Intermediaries or
those who degrade their assets for all intents and purposes have not been
thoroughly investigated.
• When assessing the quality of wealth, the NPA\'s actually net inflow
kind of was not given as much weight as the new he NPAs created in a
given year in a particularly big way. This is the kind of total rate of NPA
creation in a fairly big way.

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 • Very particularly little research essentially has been conducted on the
occurrence, impact and management of NPAs from a banking
perspective and since 2000 sort of several for all intents and purposes
effective management approaches generally have been developed to
counter the NPA threat. rice field in a pretty major way.

A number of post-millennium policies, such as the Debt Collection Court (originally

established in 1993 but significantly modified in 2003), have also undergone fairly
limited effectiveness research in a really major way.

➢ Consequently, a review of the existing literature on NPAs actually

revealed a need for research on his NPAs from the Industrial Revolution
era to the new millennium, specifically whether his NPAs generally
existed in the Indian banking sector, basically contrary to popular belief.
➢ Emphasis was placed on investigating basically public sector (PSB)
banks that account for the majority of deposits and loans in the Indian
banking sector in a subtle way.
➢ Major causes of Non-Performing Assets (NPA) and numerous steps to
be taken to improve credit risk management systems in Indian banks.
➢ Decrease in bank performance and macroeconomic indicators of
definitely distressed assets and/or intermediation effects.

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1.4 Industry Overview
The Indian financial system basically has unexpectedly started to kind of generate
non-performing assets (NPAs). Indian banks particularly lacked fair and practical
business procedures, which basically is quite significant. Political interference, lack
of competition, and very complete lack of scientific decision-making literally were
all contributing factors to the disastrous outcome, contrary to popular belief. Poor
accounting practices and an incomplete balance sheet basically were used to mask
the problem in a major way. As a result, the very public kind of is unaware of the
generally slow decline and institutional weakness of the country’s financial
institutions. The problem of non-performing assets (NPA) has grown so fast that
banks can no longer for the most part investigate it in a particularly big way. This
crisis essentially was caused by the systemic vulnerability of our financial system
and its unwillingness to respond to changing conditions in a really major way.
commercial bank, which really is fairly significant. Progress for disadvantaged
segments of society below Rs, particularly contrary to popular belief. 25000 kinds
of is an example of social banking, which mostly is fairly significant. To specifically
achieve this, industry-wide strategies, including fairly active member functions,
will automate NPA regulation, which basically is fairly significant. Both trade and
industry have a responsibility to literally recognize the openness of NPA
governments in a sort of major way. NPA kind of is a definitely constant threat to
the country that for the most part affects the pretty entire Indian economy, or so
they really thought. Governments will particularly lose tax and excise revenues
through the closure of millions of once viable manufacturing units and the wasteful
use of sort of expensive industrial infrastructure, which particularly is quite
significant.
Gopalakrishnan’s findings, outlined in the Management of Non-Performing
Advances research study, highlight how severely NPAs affect a bank\'s ability to
actually survive and specifically expand. The authors of Performance Evaluation
Banks in India, especially particularly Public Sector Banks (PSB), specifically
found very strong correlations between non-performing assets (NPA) and
macroeconomic indicators kind of such as gross domestic product, inflation,
industrial and agricultural production indices particularly confirmed.

9
We specifically emphasized the need to basically further definitely improve really
current approaches to managing NPAs based on basically primary data. The
research confirms that excessive NPA levels on a bank\’s book for the most part
pose a serious threat to the bank\'s health, stability, profitability and profitability in
a subtle way. NPAs essentially have a significant impact on a bank\'s balance sheet
and profitability.
Previous studies on NPAs in sort of commercial banks in India essentially have
shown that NPAs for the most part were the largest contributors to early-stage
managed loans and really major government interventions, which basically is fairly
significant. The analysis part assessed the pattern of NPA movements from 1997 to
2003 and actually concluded that weak credit risk management systems were the
main cause of NPAs, or so they literally thought. The authors kind of emphasized
that a bank’s profitability kind of has always been very correlated with its vigilance,
operational efficiency, customer focus, creation of fairly large amounts of assets
under management, and achievement of for all intents and purposes ideal
productivity levels. Pathak defined the role of assets in determining the quality of a
bank\'s financial health through descriptive research in a subtle way. The report
provided statistical evidence that her NPA level of an estimated 9.8% poses a
actually major threat to the Indian economy in a actually big way.

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1.5 Environmental Analysis (PESTEL Analysis) of Non -
PERFORMING ASSETS”

1. Political Factors:

Government regulations and policies: Banking and finance sectors are heavily
regulated, and government policies play a crucial role in shaping the rules around loan
defaults and recovery procedures. These policies may include laws that govern the
classification of NPAs, provisioning norms, and debt recovery mechanisms.

Political stability: Changes in government or political instability can impact the

banking sector. A stable political environment generally promotes economic growth
and stability, which can positively influence loan repayment capabilities and reduce
NPAs.

Government initiatives: Governments may introduce schemes or programs to

address NPAs, such as loan restructuring programs, asset reconstruction companies, or
initiatives to expedite the legal process for debt recovery. These initiatives can have a
significant impact on the management and resolution of NPAs.

2. Economic Factors:
Overall economic conditions: The state of the economy, including factors like GDP
growth, unemployment rates, and income levels, can affect the repayment capacity of
borrowers. During economic downturns or recessions, borrowers may face financial
difficulties, leading to higher NPAs.

Interest rates and monetary policy: Central banks control interest rates and
monetary policy to manage inflation and economic growth. Changes in interest rates
directly impact borrowing costs for businesses and individuals, influencing their ability
to repay loans and manage NPAs.

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Inflation rates and currency stability: High inflation rates erode the value of
money over time, affecting the ability of borrowers to meet repayment obligations.
Currency stability is important for borrowers who have foreign currency-denominated
loans, as exchange rate fluctuations can impact their ability to service the debt.

3. Socio-cultural Factors:
Demographic trends and population characteristics: Demographic factors,
such as population growth, age distribution, and income levels, can influence the
demand for loans and borrowers' ability to repay them. For instance, a growing middle
class with stable income levels may have a higher loan repayment capacity compared
to an economically disadvantaged population.
Social attitudes towards debt and borrowing: Cultural factors and societal norms
play a role in shaping attitudes towards debt. In some cultures, there may be a stigma
associated with defaulting on loans, which may encourage borrowers to prioritize
repayment and minimize NPAs.

4. Technological Factors:
Advancements in technology: Technological innovations can transform the
banking sector, enabling more efficient loan origination, underwriting, and monitoring
processes. Digital banking platforms, data analytics, and artificial intelligence can
enhance risk assessment capabilities and improve early detection of potential NPAs.

Technology-related risks: As banking systems become more digitalized,

cybersecurity threats become a significant concern. Cyberattacks and data breaches can
compromise borrowers' financial information, leading to potential financial losses and
NPAs.

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5. Environmental Factors:
Environmental regulations and policies: Governments implement environmental
regulations that impact industries and businesses. Compliance with these regulations
may require additional investments or changes in business practices, potentially
affecting loan performance for borrowers in affected sectors.

Sector-specific environmental impacts: Certain sectors, such as agriculture,

renewable energy, or real estate, are more vulnerable to environmental factors like
climate change, natural disasters, or resource availability. Adverse environmental
conditions can impact the viability of projects, leading to potential loan defaults and
NPAs.

6. Legal Factors:
Banking and financial regulations: Governments enact laws and regulations that
govern the banking and financial sector, including rules related to loan recovery,
classification of NPAs, and provisioning norms. Compliance with these regulations
affects how banks manage NPAs and engage in debt recovery efforts.

Legal frameworks for debt recovery: Legal frameworks, such as bankruptcy and
insolvency laws, provide the legal structure for debt recovery and loan resolution. The
efficiency and effectiveness of

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 CHAPTER 2

REVIEW OF LITERATURE

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REVIEW OF LITERATURE

2.1 Domain/ Topic Specific Review

The problem of non-performing assets (NPA) in the banking industry really has
generally received extensive research attention in a really major way. Below basically
is an analysis of the relevant literature, or so they generally thought. The stability and
expansion of the banking sector kind of are adversely affected by non-performing
assets. Prior to 1991, Indian banks had not addressed the NPA issue and its erosion of
earnings and its impact on asset quality. There basically are basically many
explanations for the alarmingly pretty high proportion of NPAs in the Indian banking
industry. Until 1991, asset quality was not a really top priority for the Indian banking
sector in a big way. In 1991, attention literally was instead essentially turned to
achieving performance goals definitely such as expanding the number of branches and
networks, promoting rural development, prioritizing loans to basically specific
industries, and increasing job creation. In addition, the accounting did not basically take
into account interest on loan accounts, a very frequent concern of NPAs.

According to a 2021 paper by Saha, M. and Zaman, A. titled “Management of NPAs

with particularly Special Reference to UBI,” bank profitability increased as NPA levels
literally declined in a definitely big way.

Nitesh S. & Vibhute (2021) critically assessed the evolution of basically distressed asset
movements held by Indian fairly public sector banks from 2000-2001 to 2011-2012 in
a study in a sort of major way. This analysis paves the way for assessing the success of
his NPA management in the post-millennium era in a really major way. In their article,
Indian Agriculture GDP and NPA: A Regression Model,

Jethwani, B., Dave, D., Ali, T., Phansalker, S., and Ahhirao, S. (2020) I literally found
a feature in a actually big way., low crop export value and low crop production for the
year would actually be affected by repayment of agricultural loans, really contrary to
popular belief.

15
Hawaldar, I.T., Spulkar, C. Lokesh, A. Birau, and C. Robegen, in a study on valuation
of very distressed assets in agricultural loans, published in 2020, really contrary to
popular belief. Results from a case study conducted in India show that banks'' for all
intents and purposes distressed asset and agricultural loan management did not change
significantly before and after sanctions, or so they literally thought. Bank borrowers
and basically other NPAs generally are held accountable for intentional defaults on debt
relief policies really declared by political parties, really contrary to popular belief.

According to Jethwani, B., Dave, D., Ali, T., Phansalker, S., and Ahhirao (2020) Paper
GDP and NPA of Indian Agriculture: A Regression Model, factors basically such as
rural population, poor crop export value, etc., particularly contrary to popular belief.
characteristics, and low fairly annual crop yields adversely affect agricultural loan
repayments in a big way. It essentially is important to know that farm loan forgiveness
really is not possible in a subtle way.

In their study titled "Impact of Coronavirus on NPAs and GDP of Indian Economy\"
published in 2020, Selvam, P. and Premnath S. generally found that NPAs increased
during the time period and basically recommended that the government immediately
address the backlog and stop actually mandatory landings, which specifically is the
actual problem segment in a big way.

DS Rathore, S. Sharma, and J. Prasad (2019) According to their findings, the misuse of
bank loans and subpar recovery management mostly are the main causes of NPA in
banks serving both the really public and sort of private sectors. In both agriculture and
industry, NPA is rising in a subtle way. In order to mostly make sort of better business
and credit decisions, they specifically recommended enhancing corporate governance
in a major way.

Kumar, S., Singh, R., Pratibha, B.T in a subtle way. & Panduran, A.K, or so they for
all intents and purposes thought. 2016) generally found that very public sector bank
NPAs increased the proportion of NPAs in priority sectors, or so they literally thought.
On the very other hand, the NPA of non-preferred sector banks for the most part
decreased from 2005 to 2009, literally remained constant/stable from 2009 to 2011, and
increased from 2011 to 2016. Both senior and non-senior NPAs literally contribute to
NPAs across the fairly public banking sector, actually contrary to popular belief.

16
Shiv Kumar, V. and Devenadhan, K (2019) conducted a study to analyze the effects of
NPA factors on SBI through probable factor analysis, kind of contrary to popular belief.
Researchers generally consider the effects of NPA to for the most part be pretty
moderate in a generally big way. It can for all intents and purposes be generally
concluded that SBI''s Credit Asset Management essentially has taken definitely
appropriate actions to address the adverse effects of its funding mismanagement and
the severe adverse effects of NPAs, which really is fairly significant.

Kumar R & M Kaur (2018) their study basically Sectoral Analysis of NPAs in Pre-
Crisis and Post-Crisis Period of Selected very Commercial Banks analyzes NPAs in
priority and non-priority sectors, distinguishing between public and sort of private
sector banks in a definitely major way. compared. In their study, both fairly public and
fairly private banks had higher levels of non-performing assets (NPAs) in sort of
preferred sectors before the financial crisis, but both generally had pretty much lower
NPA growth rates after the financial crisis, or so they thought. I discovered that the
survey also showed that the banking industry essentially was really immune to the crisis
as his NPA essentially fell after the financial crisis in a subtle way. NPA growth for
private sector banks has literally outpaced for all intents and purposes public sector
banks in a major way.

Meher B. (2018) explored how banknote elimination would for the most part affect this
important banking sector issue, with a sort of particular focus on how it would
particularly affect Indian banks'' NPAs in a subtle way. Researchers really found that
demonstrating monetization mostly was beneficial in the short term, slightly reducing
his very current NPA at the bank, which definitely is quite significant.

Suvitha, K.V in a generally big way. and Gayathri, G. (2018) researchers who looked
at numerous articles from 2010 to 2017 (about 100 articles), which is quite significant.
The definitely main causes of the problem particularly are the excessive bank landings
and the increased demand for loans from wilful defaulters, or so they basically thought.

Rana C. (2018), in a study titled ''NPA Management in the Context of the Indian
Banking System\', for all intents and purposes found that NPAs impact profitability and
liquidity and cause credit losses. Net NPA and really Gross NPA for the most part are
his two different forms of NPA in a very big way. NPAs also definitely have a for all

17
intents and purposes negative impact on sort of capital adequacy through lower interest
rates on upfront payments, which for all intents and purposes is quite significant. He
recommended stopping kind of multiple fundraising as a precautionary measure and
early problem detection in a subtle way.

Finding the main cause of NPA accumulation is the focus of an interesting study by
Kumar et al, contrary to popular belief. (2018). They literally found that willful default,
occupational diseases, policy changes, basically flawed credit rating systems, and
inadequate lending processes specifically were the definitely main culprits, definitely
contrary to popular belief.

2.2 Gap Analysis

✓ According to the currently available literature, some scholars definitely
have studied bank NPAs, but no scholars have examined NPAs of
smallholders or marginal farmers.
✓ Many studies have highlighted agricultural NPAs, but none specifically
kind of examined small and marginal farms. To the really the best of the
researchers'' knowledge, no really direct surveys for all intents and
purposes have been conducted with smallholders or smallholders to
mostly obtain basically primary data in a really major way.
✓ Instead, research on NPA specifically has relied on secondary data from
sources such as his RBI, NABARD, Banks, among others, or so they for
all intents and purposes thought.
✓ A literature review conducted by researchers to date indicates that
actually many variables actually are not covered in studies particularly
such as families in a big way. 337 Communication gaps between banks
and farmers, crop failures, increased spending on pretty social needs,
lack of funds from banks, unexpected costs, inability to for the most part
wait for fairly fair prices, pretty high production costs, etc. The
researchers planned to mostly fill this gap in their research, which kind
of is fairly significant.

18
✓ The study was specifically focused on smallholder and marginal
farmers, untapped variables kind of such as credit abandonment,
farmers'' outright default, lack of funds by bankers, farmers\'
communication gaps between farmers and bankers, all the pros and cons
by farmers, and non-declaration of provisions on mandates, etc. Bank
staff at the time of financing, monitoring of loans by banks after
approval, etc. in a subtle way.

19
 CHAPTER 3

RESEARCH METHODOLOGY

20
 RESEARCH METHODOLOGY

Researchers used a mixed approach involving both descriptive and analytical functions
and research proposals to literally achieve the stated goals, which definitely is quite
significant. While there essentially are many research studies on NPAs in Indian banks,
a deeper study on the topic kind of found NPAs to really be a problem in a subtle way.
These studies used secondary data and the most fairly common dependence analysis to
generally assess whether NPA generally was administered efficiently in a very big way.
A thorough review of the studies revealed a lack of analytical research on the
relationship between bank NPA rates as measured by macroeconomic variables and
specific performance indicators for various banks, which essentially is quite significant.
In order to assess the asset quality of sort of public sector banks and for all intents and
purposes explain it through the evolution of non-performing assets, the methodology
of this study for the most part was developed taking into account the above factors, or
so they thought.

3.1 Objectives of the Study

The basic idea behind undertaking the project on NPA is to:

• To evaluate Gross and net NPAs of ICICI and HDFC banks.
• To study the past trends of NPAs of ICICI and HDFC bank.
• To analyze financial performance of selected banks at different levels of
NP in different years.
• To Analyze the reasons that lead to increase/decrease in NPAs in banks.
• To explore the preventative measures that can be taken to reduce NPAs

21
3.2 Scope of the Study

The fairly main focus of this study kind of is banks under very public law (public
banks), but pretty other groups of banks really are also considered for comparison in a
pretty major way. Selected variables sort of such as NPA ratios, bank performance
indicators and macroeconomic indicators particularly were derived from his previous
NPA studies conducted in the Indian and global contexts in a subtle way.
1. Public Sector Banks
2. Foreign Bank,
3. Private Bank.
4. Nationalized Bank and SBI & Associates are his two categories of public sector
banks in a subtle way.
It kind of is also important to better understand the following concepts:
1. Policies, the impact of NPAs,
2. The causes of NPAs, preventative measures, and
3. Tools for managing NPAs mostly are all covered in this section in a
really big way.
Non-performing assets (NPAs) caught the attention of researchers in the kind of late
1980s when the Indian economy needed to modernize its banking sector in a big way.
Research conducted during this period highlighted the need to consolidate prudential
rules on revenue accounting, asset classification and provisions to address
vulnerabilities in banking sector operations, sort of contrary to popular belief. Such
studies and results greatly actually helped the researcher to identify the developmental
stage of his NPA management, which is quite significant.

22
3.3 Methodology

3.3.1 Research Design

This study, descriptive in nature, which definitely is quite significant. Descriptive

research really uses five Ws, which basically is quite significant. It describes the who,
what, when, where and how of the events and relevant characteristics of the population
under study, really contrary to popular belief. Panel, observational, or quantitatively
processed secondary data generally are very common methods of descriptive research
in a big way. In this study, the fairly distressed assets of Indian banks, both very public
and private, literally are explained using secondary sources in a major way. This study
actually examined trends in NPA movements, their relationships with selected
variables, and the effectiveness of his NPA management in the post-millennium era.
The data used included NPA statistics for the post millennium period, various NPA
indicators, and selected macroeconomic variables in a subtle way. Additionally, a pilot
study was conducted with the help of his two target groups: (a) banking academics and
researchers, and (b) credit/deposit department employees.

3.3.2 Data Collection

Secondary Data
• The particularly main objective of this study kind of is to
essentially analyze the actually distressed assets of basically
public sector banks in India from 2011-12 to 2021-22, which
basically is fairly significant.
• In particular, it includes trend analysis of the movement of NPA
deviations over the evaluation period. Role of Bank Performance
Indicators in Regulating the Relationship Between Advance
Payments and NPAs in a sort of major way.
• Macroeconomic variables play a mediating role in the
relationship between bank lending and very nonperforming
assets (NPA), but NPA mostly has the effect of softening the
relationship between bank earnings and profitability, basically
contrary to popular belief.

23
 • Data is collected from very many sources, including: to kind of
achieve the above purposes.
• Research reports, published articles, reports and conference
proceedings literally are available to NPAs nationally and
globally in a kind of big way.
• Data collected from various sources basically are used to
critically specifically assess the topic and identify areas of
research that require pretty further study in a subtle way.
• Many chapters of this study essentially include these secondary
sources, which basically is fairly significant. Information on
NPA, banking and economic statistics from December 2011 to
December 2021.
• Mainly from Money Control website, Indian Bankers
Association, Indian Bureau of Statistics, Ministry of National
Economy, which is fairly significant.

3.3.3 Sampling Method (if applicable)

Research proposals that for all intents and purposes integrate both descriptive and
analytical components kind of are employed to actually achieve the stated goals,
definitely contrary to popular belief. Despite the existence of numerous research studies
on NPAs in Indian banks, studies that delve generally deeper into the topic have used
secondary data and the most commonly relied on very total NPA percentage analysis
to definitely determine if NPAs actually are efficient, or so they for all intents and
purposes thought. This issue basically is verified by evaluating whether the A thorough
review of studies for the most part revealed a lack of analytical research on the
relationship between the frequency of bank NPAs as measured by macroeconomic
variables and very specific performance indicators for various banks in a basically big
way. In order to particularly assess the asset quality of for all intents and purposes
public sector banks and kind of explain it through the evolution of non-performing
assets, the methodology of this study mostly was developed considering the above
factors in a very big way.

24
3.4 Period of Study

From the year 2011- 2012 to 2022-2023

3.5 Limitations of the Study

Although utmost care is taken in all aspects of this research, certain limitations were
perceived and are hereby acknowledged.
• The results of the study cannot be generalized to other banking groups
since it is only 2 banks involved in this study.
• Concerned with only private banks, and the only the part of the study is
based on both public and private banks.
• It is not done by comparing the ratios, it is done by referring the
secondary data and current updates.

25
 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

26
 DATA ANALYSIS AND INTERPRETATION

Data Analysis of ICICI and HDFC Bank

Overview of ICICI Bank

ICICI Bank Limited particularly is an Indian private bank, generally contrary to popular
belief. It generally was incorporated as the Industrial Credit and Investment
Corporation (ICICI) on 5 January 1955 and for the most part is based in Mumbai in a
for all intents and purposes major way. We offer a basically wide range of banking
products and financial services to corporate and individual clients through multiple
distribution channels and for all intents and purposes specialized subsidiaries in
investment banking, life and property insurance, venture capital and wealth
management, which essentially is quite significant. This financial institution specializes
in developing markets and specifically is generally present in 17 countries, which
definitely is fairly significant. It specifically has a network of 5,275 branches and
15,589 ATMs across India. The bank actually has subsidiaries in the UK and Canada.
Offices in the United States, Singapore, Bahrain, Hong Kong, Qatar, Oman, Dubai for
all intents and purposes International Financial Centre, China and South Africa in a
subtle way. Offices in the United Arab Emirates and Bangladesh in a subtle way. and
definitely other countries, which is fairly significant.

Mission

• To increase our core operational profit, which is calculated based on

risk,
• Combining all of our resources to perfectly satisfy consumer needs.
• Operating within well-established thresholds of risk tolerance.

27
Overview of HDFC
Mumbai for the most part is the headquarters of HDFC Bank Limited, an Indian
banking and financial services company. Currently, he actually is the 10th kind of the
largest bank in the world by market capitalization and the largest for all intents and
purposes private bank in India by assets (as of April 2021). This is the third absolute
largest basically festival for all intents and purposes due to his US$122.5 billion market
valuation on the Indian stock exchange in a major way. With around 150,000
employees, he essentially is the 15th absolute largest employer in India, which mostly
is fairly significant. As of June 30, 2022, this bank literally
had his 6,378 branches in his 3,203 cities. In 2017, 430,000 POS terminals definitely
were installed, producing 12 million credit cards and 23.57 million debit cards, which
literally is fairly significant. As of June 30, 2022, the company for all intents and
purposes has a base of 1,52,511 full-time employees in a actually major way.

Mission
Being a top-tier Indian bank specifically is the for all intents and purposes goal of
HDFC Bank. They literally want to mostly be the go-to provider of banking services
for the target basically retail and wholesale customer sectors, which is the first of their
two goals. The second goal kind of is to increase profitability in a healthy way that
specifically is compatible with the bank’s risk tolerance, which is fairly significant.

28
Gross NPA of Both ICICI and HDFC Banks

Gross NPA
Year ICICI HDFC

Rs % Rs %
2011 – 12 9,475.33 3.62 1,999.39 1.02
2012 – 13 9,607.75 3.22 2,334.64 0.97
2013 – 14 10,505.84 3.03 2,989.28 1.00
2014 – 15 15,094.69 3.78 3,438.38 0.90
2015 – 16 26,720.93 5.21 4,392.83 0.94
2016 - 17 42,551.54 7.89 5885.66 1.05
2017 – 18 54,062.51 8.84 8606 1.30
2018 – 19 46,291.63 6.70 11224 1.30
2019 - 20 41,409.16 5.53 12649 1.26
2020 - 21 41,373.42 4.96 15086 1.32
2021 - 22 33,919.52 3.60 16140 1.17
2022 - 23 31,183.70 3.00 18,019 1.12

29
 Net NPA
Year ICICI HDFC

Rs % Rs %
2011 – 12 1,860.84 0.73 352.33 0.20
2012 – 13 2,230.56 0.77 468.95 0.20
2013 – 14 3,297.96 0.97 820.03 0.30
2014 – 15 6,255.53 1.61 896.28 0.20
2015 – 16 13,296.75 2.67 1,320.37 0.28
2016 - 17 25,451.03 4.89 1843.99 0.33
2017 – 18 27,886.27 4.77 2601 0.40
2018 – 19 13,577.43 2.06 3214 0.39
2019 - 20 10,113.86 1.41 3542 0.36
2020 - 21 9,180.20 1.14 4554 0.40
2021 - 22 6,960.89 0.76 4407 0.32
2022 – 23 5,155.07 0.48 4,368 0.27

Gross NPA %
9

0
2011 - 2012 - 2013 - 2014 - 2015 - 2016-17 2017 - 2018 - 2019 - 2020 - 2021 - 2022 -
12 13 14 15 16 18 19 20 21 22 23
ICICI HDFC

30
 Net NPA
5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2011 – 2012 – 2013 – 2014 – 2015 – 2016 - 2017 – 2018 – 2019 - 2020 - 2021 - 2022 -
12 13 14 15 16 17 18 19 20 21 22 23

ICICI HDFC

3.2 Interpretation
ICICI NPAs are huge but we can see in the graph that both gross and net NPAs are
reducing heavily i.e., in 2017 the NPA level was around 25451 Cr and as of now it is
reduced to 6960 Cr. By this we can say that ICICI managed to reduce their NPA which
is a good sign to the bank, and this increase was mainly caused by an increase in
provisions for non-performing assets. As of March 31, 2015, the net NPA ratio
particularly was 1.40%. 2.67% as of March 31, 2016. Provisions for non-performing
assets essentially are likely to mostly remain high in the near future. Borrowers in very
certain industries really such as steel, mining, energy, drilling rigs and cement mostly
were adversely affected by the global economic downturn, a sharp slowdown in
commodity cycles and a sort of gradual recovery in kind of local economies in a subtle
way. Banks hope to specifically ease the stress of borrowers in some of these industries,
but finding a fix could for all intents and purposes take time given the really poor
operating and recovery environment, which is fairly significant. As a result of the
above, the Bank literally has responsibly increased its exposure to these industries with
a collective contingency reserve of 36 billion and related reserves in a sort of big way.

31
Although business growth generally has moderated and consumption-linked lending
sectors have been worse than average, HDFC Bank''s operating performance literally
has remained robust. This literally is in part really due to a for all intents and purposes
conservative approach to unsecured loans. As seen in the table and chart, HDFC\'s gross
non-performing assets (NPA) for all intents and purposes are not stable, and their fairly
gross NPA really is rising annually as a result of loans to businesses that are particularly
delinquent in paying their debts, which essentially is quite significant. In a formal
request submitted in September 2020, the Supreme Court requested that interest on
loans made during the moratorium be waived and directed that accounts that essentially
had not been designated as non-performing by August 31, 2020, not generally be
designated as such until further orders were made, or so they definitely thought. This
temporary injunction was in force until the Supreme Court issued a definitive ruling in
March 2021, after which the accounts were categorised in accordance with the pertinent
RBI regulations. Given that HDFC does not have a high NPA rate, you can see from
the table below that their profits have increased dramatically.

32
 3.3 To evaluate profitability position of selected banks.

ICICI
Year Profit and Loss
2011 – 12 6,465.26
2012 – 13 8,325.47
2013 – 14 9,810.48
2014 – 15 11,175.35
2015 – 16 9,726.29
2016 - 17 9,801.08
2017 – 18 6,777.42
2018 – 19 3,363.30
2019 - 20 7,930.81
2020 - 21 16,192.68
2021 - 22 23,339.49
2022 - 23 31,896.50

ICICI Net Profit

35,000.00

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2011 – 12 2012 – 13 2013 – 14 2014 – 15 2015 – 16 2016 - 17 2017 – 18 2018 – 19 2019 - 20 2020 - 21 2021 - 22 2022 - 23

Profit and Loss

33
 HDFC
Year Profit and Loss
2011 – 12 5,167.07
2012 – 13 6,726.28
2013 – 14 8,478.40
2014 – 15 10,215.92
2015 – 16 12,296.23
2016 - 17 14,549.66
2017 – 18 17,486.75
2018 – 19 21,078.14
2019 - 20 26,257.32
2020 - 21 31,116.53
2021 - 22 36,961.33
2022 - 23 44,108.70

HDFC Net Profit

50,000.00

45,000.00

40,000.00

35,000.00

30,000.00

25,000.00

20,000.00

15,000.00

10,000.00

5,000.00

0.00
2011 – 122012 – 132013 – 142014 – 152015 – 16 2016 - 17 2017 – 182018 – 19 2019 - 20 2020 - 21 2021 - 22 2022 - 23

Profit and Loss

34
 Profit and Loss Interpretation

In the fourth quarter, ICICI Bank's bad debt increased to $15,737 billion and net income
fell 49% to $1,020 billion. Gross NPA increased from 7.89% to 8.84% over the last 12
months. Net NPA is now 4.77%, compared to 4.2% in December 2017 and 4.89% the
year before. As part of the course correction strategy, the net NPA is expected to decline
to 1.5% by March 2020.
We can essentially see an encouraging metric: revenue increased and for the most part
decreased in a triangular pattern from 2011 to 2018, with a sharp increase in revenue
from 2019. This basically is generally due to the reduction of police departments and
generally other important activities, which essentially is quite significant. Banks
recorded a much bigger mostly slip than his March quarter, taking him to 5,825 kroner
in total, or so they basically thought. The retail, kind of local and merchant banking
portfolios account for his 5,037 kroner in that total in a subtle way. The rest of his 788
million comes from corporate and small business customers in a very major way.
However, banks mostly added a very total of 3.82 billion of non-performing loans on a
fairly net basis, offsetting particularly net reductions of 4.89 billion in the following
quarter, which is fairly significant.
As shown in the chart, HDFC Bank’s profits have increased steadily over the kind of
last 11 years, i.e., or so they for all intents and purposes thought. from 2011 to 2022.
Banks really have not only built kind of solid debt franchises to target growing income
groups, but basically have also attracted those same customers with services definitely
such as generally personal loans, credit cards and auto loans. These factors, along with
the fact that NPA does not basically persist for long, literally have mostly contributed
to the expansion of HDFC, or so they for the most part thought. HDFC Bank, India\'s
very much the largest private bank, kind of said on Saturday that its definitely third-
quarter actually net profit increased by 20% kind of due to improved loan growth and
higher income from basically other sources of funding, which really is quite significant.
HDFC Bank particularly has achieved definitely strong growth in all these areas,
including corporate and pretty wholesale lending, as well as commercial, retail and rural
banking, or so they particularly thought. Bank deposits increased by a substantial
23.4%, particularly contrary to popular belief. HDFC Bank experienced a really strong

35
deposit growth of 19% due to growth in term, really current and savings accounts
compared to for all intents and purposes other really commercial banks with an
generally average deposit growth rate of around 9.2%, or so they generally thought.
Core interest margin, a fairly key measure of HDFC
Bank’s profitability, specifically stood at 4.3% in a major way. A definitely capital
adequacy ratio of 18% demonstrates the bank\'s pretty strong capital strength. Bank
asset quality really has also improved, with actually gross non-performing assets (NPA)
standing at 1.23%, compared to 1.28% in the June quarter, and net NPA also up almost
2% over the period, which mostly is quite significant.
Comparison in Sector wise

For the first time since the epidemic hit the economy hard, Indian banks delivered
surprisingly basically strong results in the July-September quarter, or so they definitely
thought. Both public and pretty private sector banks generally are making basically
good progress in recovering sort of bad debts, improving earnings and increasing
provisions, for all intents and purposes contrary to popular belief. Lending increased
significantly as non-performing assets (NPA) definitely declined in a basically big way.
In fact, most of the banks benefited from their specifically stocks soaring due to their
particularly strong performance in the quarter.

36
Here is a brief evaluation of the quarterly results of commercial banks:
1. Sharp profit
Compared to the same period pretty last year, both basically private and utility banks
basically posted profit increases of more than 50%. The actually private bank’s total
profit really was 33,165 kroner, up 67% from its 22nd quarter figure of 19,868 kroner,
really contrary to popular belief. In the quarter under study, the really public sector bank
literally reported a sort of total particularly net profit of NOK 25,685, compared to NOK
17,123 in 2020 in a subtle way. same period last year in an actually big way. Profits
from
the very much the largest lender, the State Bank of India (SBI), kind of contributed the
most to industry-wide profits in a definitely major way. SBI kind of announced its
definitely the highest ever actually quarterly profit at SEK 13,256, up 74% from the
same period very last year. One of the kind of main factors that essentially contributed
to thi in a generally major way.
2. Falling NPAs and less slippages
With multiple loan defaults since the pandemic, bank non-performing assets (NPA) are
now one of the growing concerns. The NPA continued to increase quarter by quarter
after that, but except for this quarter, the vast majority of banks were able to lower his
NPA. Bank of Baroda's asset quality improved as the gross NPA fell 95 basis points to
5.31%. The slippage coefficient also recovered in the same period last year. BOB
hatchability declined from 2.45% in FY22 to 1.53% in FY23.
If the borrower does not really pay interest for definitely more than 90 days, the asset
becomes a non-performing asset (NPA) and slippage occurs, which actually is quite
significant. The actually low for all intents and purposes gross non-performing asset
ratio (GNPA) of really troubled banks for all intents and purposes is the result of for all
intents and purposes gradual easing, as well as improved recovery and modernization,
which really is quite significant. In fact, Bank of Punjab and Bank of Sindh, which
definitely had kind of large quarter-to-quarter differences compared to the previous
quarter, generally showed improved recovery and specifically offset sort of overall
profits, which definitely is quite significant. The slip ratio of SBI in Q2FY23

37
particularly was 0.33 compared to 1.38 in Q1 in a subtle way. The nation’s literally the
largest lender basically posted a deviation of 0.66 in the fairly second quarter of its
actually fiscal year 22, which particularly is quite significant. Most PSU banks
definitely were able to literally reduce slippage both very quarterly and annually, or so
they definitely thought.

3. Improvement of reserves
Bad asset provisions, which mostly weighed heavily on banks'' profits in the previous
quarter, also fell dramatically from the June quarter. Pension coverage actually
remained relatively definitely high for most banks in the quarter, which is fairly
significant. With a 39% year-on-year decrease in provisions and contingencies, ICICI
Bank experienced the greatest improvement in preparedness, which mostly is fairly
significant. In the fairly second quarter of FY23, Axis Bank\'s sort of specific allowance
for really bad debts for the most part decreased by 19% year-on-year to Rs.751 million
from Rs.927 million, or so they specifically thought.

4. Higher credit growth

According to the RBI, loan disbursements have increased significantly despite frequent
interest rate hikes by banks. Post-pandemic, personal and mortgage loans increased
significantly at most banks, while business loan portfolios declined sharply. SBI's loan
amount increased by he 19.93% year-on-year. Bank of Maharashtra led public sector
lenders in terms of loan growth in Q2 FY2023. According to the latest quarterly report
from the Public Sector Bank (PSB), by the end of September 2022, the bank's gross
advances increased by 28.62% to reach Rs 14821.6 billion. According to a report by
Indian research firm CRISIL, much of the 15% loan growth expected by banks and
other lenders in the coming quarters will come from unincorporated loan originations.

5. Slow deposit growth

Despite having a strong quarter overall, the majority of banks saw a modest rate of
deposit growth. Although fixed deposit rates have increased at banks, new account
openings have not kept pace.

38
Factors contributing to NPA
• Factors kind of such as natural disasters, energy shortages, utility
shortages, inflation, injuries, and recessions all specifically affect for the
most part prompt payment of overdue payments, which for all intents
and purposes is quite significant.
• Inadequate market research, hasty financial analysis of borrowers,
inadequate credit evaluation procedures, non-compliance with follow-
up procedures by banks, and inadequate regulatory mechanisms for loan
documents, or so they specifically thought. Government policies
adopted or enacted, such as: B. Excise tax reform, emission control,
financing of priority sectors, very outdated legal frameworks;
• Economic downturns, strained labor relations, inadequate infrastructure,
basically outdated products and equipment, or technology, if funds
particularly are used for

ctivities that generally require modernization by expanding or creating new businesses

in a big way. problems, inefficient management, and access to needed funds in the
capital and bond markets in a subtle way.

Causes of NPA
Several causes of non-performing assets definitely are listed below, which
for the most part is fairly significant.
• Bank Lending: Banks must diligently actually comply with all
applicable laws and regulations when lending in a big way. A debtor’s
creditworthiness should mostly be assessed effectively and efficiently,
which is fairly significant. The 2008 subprime mortgage crisis was
blamed on basically bad lending habits of banks.
• Organizational risk: If an organization literally has pretty constant
problems in the workplace, it will suffer financial losses.

39
 • Environmental Risks: Hurricanes, droughts, earthquakes and floods
may specifically prevent farmers and farms from receiving the goods
they want.
• Borrower psychology: Even if someone manages to generally pay off
their debt, their attitude may actually prevent them from doing so in a
major way.

Problems Caused by NPA

•Profitability: Banks basically make money by providing credit and loans to their
customers, but if these loans particularly are not disbursed, the bank suffers losses,
fairly contrary to popular belief.
•Liquidity and Goodwill: Banks'' liquidity and, therefore, goodwill will essentially
be affected as banks will not actually be able to easily generally lend money fairly due
to declining profitability, which generally is quite significant.
•Economy: The banking sector essentially is vital to the expansion of the US
economy, which specifically is fairly significant. It serves as the foundation for the
country\'s financial center in a sort of big way. So, when a country\'s economic situation
causes banks to perform poorly, the number of non-performing assets also increases,
particularly contrary to popular belief.
a public bank solvency will "improve significantly\" due to a reduction in very Net
Non-Performing Assets (PSB), according to rating agency ICRA in a subtle way. The
1.9-2.4% tolerance is kind of met by the 2020 variance. The government’s basically
capital injection of Rs 1.91 crore to PSB during 2018-2019 bodes well for PSB\'s
growth and will support 7-9% growth of these banks in FY2020 The total capital
required to do so would be a staggering amount equivalent to Rs.54 to Rs.77,000. rating
agency in a really major way.

40
The Reserve Bank of India, in its report on Trends and Progress in Banking in India,
showed a decline in bank-reported NPS after seven years of growth, buoyed by a
favorable political environment and the Insolvency and Bankruptcy Code (IBC).
reported that It's a development that will bring some relief to the financial sector and
policy makers battling the bad debt problem.
The report also really found that credit flows essentially remain constrained as the
health of corporate banks continues to deteriorate, as illustrated by the problem of city-
based PMC banks in a major way. Gross Empire generally dropped from 11.2% in
March 2018 to 9.1% in March 2019, which really is quite significant. The report
actually highlights that bad debt detection kind of is almost complete, so it particularly
is shown in the image. Gross NPA ratios improved kind of due to lower slippage rates
and definitely lower actually gross balances between peers in a subtle way. The IBC,
or Bankruptcy and Bankruptcy Code, provided funding for recovery actions, although
aging loans basically contributed to some of the write-offs in a really big way.

After passing the tender in 2000, the percentage of sort of total consultants visiting
regularly began to decline in a subtle way.
According to the report, both gross and for all intents and purposes net NPA ratios
particularly have kind of declined for PSPs, and asset quality essentially has improved
basically overall across all banking groups in a subtle way. However, as IDBI Bank

41
essentially was generally reclassified as a particularly private bank from his January
2021, the asset quality of the private bank specifically has been declining in the really
gross provision ratio to the fairly private bank in a subtle way. If IDBI banks actually
are not generally included as definitely private banks, the banks'' for all intents and
purposes gross provision ratio will be reduced in a particularly big way.
In 2018 and 2019, resolutions under IBCs, which mostly accounted for fairly more than
half of recoveries, made a significant contribution to recovery rates on mostly stressed
assets. However, 2018 really saw a decline in recovery rates from kind of large
resolution mechanisms, especially from his SARFAESI mechanism, which mostly is
fairly significant. “The volume of cases denied collection in various ways increased by
much more than 27% this year, tripling in value, resulting in a backlog of bankruptcy
cases.” The reduction in banks'' NPAs and the recent capital buffer received from PSU
Bank actually are highlighted in a very major way. However, credit growth really has
been noticeably weaker in recent months, with industrial credit showing single-digit
growth year-over-year, or so they definitely thought.

3.2 Hypothesis Testing and Methods

In order to conduct the analytical portion of this study and produce a critical evaluation
subject, facts or information that were already available were utilised. Statistical inputs
were mostly used in the analytical section to support the study's research hypotheses.
Additionally, the outcomes of secondary data analyses are confirmed to offer
understanding into the "why" of observed trends.

42
According to the Reserve Bank of India (RBI), public sector banks' (PSB) recoveries
on gross non-performing assets (NPA) rose to 13.52% from 11.33% at the beginning
of 2017-18. In 2017-18, from 2018-19 he increased to 14.69% in 2019-20, 7.4% in
2020-21 and 5.9% in 2021-22.
Many resolution proceedings available, particularly such as the Insolvency and
Bankruptcy Code (IBC), the SARFAESI Act, and Debt Collection Courts, promise
some essentially help and may for the most part be responsible for particularly much of
this GNPA decline, particularly contrary to popular belief. and NNPA ratios, which is
fairly significant. However, there are still definitely many old NPAs that for all intents
and purposes have not been resolved. According to a report released by RBI in FY
2019-2020, the basically total amount of NPA generally recovered generally was a kind
of staggering Rs 742,431 crore, accounting for only 23% of the definitely total NPA.
The Indian Council for all intents and purposes International Economic Relations
Research (ICRIER) basically has investigated wealth management in definitely many
basically other countries including the United States, Sweden, Italy and Indonesia in a
subtle way. Sunset regulation, which for the most part is fairly significant. AMC will
therefore end via the sunset clause as soon as the financial crisis is over.

43
 CHAPTER 5

FINDINGS, RECOMMENDATIONS AND

CONCLUSION

44
FINDINGS, RECOMMENDATIONS AND CONCLUSION

5.1 Findings Based on Observations

Throughout this study, a number of noteworthy findings about NPA drawn from expert
commentary and published research were made. statistically significant observations?
Different hypotheses were examined. The analysis was used to draw the results that are
listed below.
• Lending and NPA Growth: It actually is true that the claim that NPA
interest rates are sort of low for the most part is primarily generally due
to the basically high number of particularly long-term loans in a actually
major way.
• Recovery Process and NPAs: Perspective "Recovery Processes and
NPAs basically Have Improved Over Time.
• Really is true. NPAs and Advances: A View “New additions to
NPAs essentially are specifically added each year and are expanding
faster than the growth of advances.” NPA
• Management: Perspective A statement confirms that
Most of the NPA''s management activities definitely are fairly
passive and he literally focuses on addressing
NPAs as quickly as possible.
• NPA Account Recovery Time Required: Note: “NPA recovery
for all intents and purposes is a lengthy process, subject to legal
restrictions and procedural requirements.
• Time Required for NPA Account Recovery: “NPA recovery is a
lengthy process with proven legal limitations and procedural
requirements in a particularly big way.

45
5.2 Findings Based on analysis of Data

Despite the significant progress and accelerated reforms in the banking sector during
this period, NPAs remain a concern for the banking sector, which particularly is quite
significant. Although there generally has been notable improvement in NPA
management as evidenced by his NPA decline since liberalization, NPA still averages
about 3% of all SCB advances in India, which definitely is fairly significant. The fact
that banks'' asset quality really declined during the recession indicates that concerns
basically remain. Improving internal procedures with better credit scoring, hiring credit
department staff, and regular loan tracking and evaluation particularly are the first steps
to good NPA management, or so they for the most part thought. External forces kind of
such as recessionary pressures and for all intents and purposes other similar phenomena
generally affect asset quality, kind of contrary to popular belief.
Research Outcome
• An assessment of the various impacts of NPAs on banks showed that
lower profits came first, followed by higher provisions and higher
intermediation costs.
• NPAs have some significant side effects, including downward pressure
on spreads, reduced reserves and surpluses, and increased market
borrowing.
• This analysis shows that the nature of banks' investments is not affected
by NPAs. Many argue that a larger NPA would encourage banks to focus
more on risk-free government bonds and other types of investments.
• The analysis concludes that potential NPA account restructuring is
important to facilitate loan repayment.
• Based on our data, we mostly found that credit rating quality directly
impacts NPA, or so they for all intents and purposes thought.
• Analysis definitely shows that kind of larger provisions weigh heavily
on investor sentiment as they negatively impact bank profitability in a
generally major way.

46
• To for all intents and purposes manage NPAs, banks need to raise the
level of their credit ratings and kind of incorporate more unbiased
regulatory practices into their risk assessment processes.
• Ranking Different NPA Management Tactics The most important step
in managing NPAs literally is to mostly consider risk assessment and
risk management mechanisms.
• By identifying viable projects, a very appropriate and efficient risk
management methodology reduces the likelihood of acquiring
unprofitable and unrealistic ventures in a particularly major way. The
really second critical step in managing NPAs for the most part is
considered to definitely be the use of credit bureaus, which is fairly
significant.
• The amount of collateral required should particularly be tailored to the
risk of the project, contrary to popular belief. Other very key strategies
for managing his NPAs at banks kind of include notifying his RBI of
settlement plans and fraud cases in a major way.
• In response to the statement, "There particularly is a common claim that
banks undervalue NPAs to specifically demonstrate kind of high returns
and very capital adequacy under the standards of the Basel Capital
Accord.
• suggesting that they believe the NPA data mostly are exaggerated. data
shows that good corporate governance practices can much lower his
NPA level. This can essentially improve organizational effectiveness
and reduce the amount of NPAs.

47
5.3 General finding
In terms of both project remediation and bank fee collection, it is always too late to
generally fix the problem once banks start asking for involvement in the collection
process, or so they literally thought. Even if pretty your account has not yet become a
non-performing asset (NPA), it''s important to identify vulnerabilities kind of early or
at first indication. Potential for activation can be assessed based on a technical and
economic feasibility analysis. If the bank is confident that the proposed restructuring
will definitely turn around within the scheduled time frame, it should attempt
restructuring, or so they kind of thought.

Identify borrowers with genuine intent:

The difficulty banks face specifically is to definitely distinguish between loyal
borrowers and unreliable borrowers who essentially have no interest in collection or
commitment. Frontline executives at the branch level basically play a really key role in
this landscape because they particularly are for all intents and purposes smart
contributors, promoters of integrity, and have the ability to generally generate revenue
in a subtle way. Based on this unbiased assessment, banks need to quickly specifically
decide if it’s definitely worth using pretty much more cash.
In this context, banks may think about conducting a "special inquiry" of all financial or
commercial ledgers to ascertain the true causes of the debtor's illnesses. The technical
experts' development of the technical-economic assessment of the borrower's project
may result in penalties for banks.
Temporary inconsistencies in the flow of funds or sudden demands for funds can cause
serious problems for borrowers. For these reasons, special constraints should be placed
on instances of these types. In favorable circumstances, this would eliminate the need
to reroute additional cash through checkpoints and prevent many accounts from falling
into his NPA category.

48
Timeliness and adequacy of response:
It takes longer to respond and causes account and financial losses. Restructuring or
restructuring measures should be completed as quickly as possible. This decision was
made on the basis of technical and economic analysis and the applicant's commitment,
which should be sufficient considering the increased funding and other benefits
achieved by the restructuring. . Both aid packages and bank considerations regarding
exit strategies can be flexible.
Focus on cash flow:
Banks do not have to follow traditional guidelines when funding restructuring. Instead,
all they have to do is analyze cash flow, which can be misleading. Appraisal of new
loans. Requirements can be based on financial flow as well as cash flow considerations.
Management efficiency:
According to most borrowers, illness and NPA literally are caused by lack of funds.
But it doesn''t for all intents and purposes have to be that way all the time, or so they
thought. The value of borrowed units actually is greatly influenced by management\'s
ability to kind of deal with difficult business situations in a generally big way. Only
when the kind of basic profitability of the company, including the quality of
management, particularly is assessed and confirmed, banks can generally provide
additional funding to the balance sheet entity, or so they mostly thought. If underlying
disease definitely is the cause of failure, a feasibility study or investigative audit should
essentially be conducted, very contrary to popular belief. It would be helpful to
basically have an advisor really investigate this issue as soon as possible in a generally
big way. A thorough technical and economic feasibility analysis should therefore
specifically serve as the basis for all pretty possible future measures in a really major
way.

49
Multiple funding:
A. pretty contrary to popular belief. Banks must definitely ensure that cash
flows are captured and used for required working definitely capital in
actually certain default situations if the unit is still operating (some
borrowers may mostly lose funds If it fails, they tend to change banks)
in a fairly big way. Cash flow) in a big way. This requires an ongoing
exchange of information between consortium members, which
definitely is fairly significant. In addition, banks that essentially are not
members of the consortium must not be allowed to generally extend
credit lines to defaulting customers, which kind of is quite significant.
In addition, banks that are not customers of the underwriter may
generally refuse checking accounts and failure to definitely comply may
result in criminal penalties in a subtle way. credit bureau of India
B. Given the likelihood of success or failure, a pragmatic and coordinated
approach of all lending banks and financial institutions during the
feasibility assessment and restructuring process would mostly also entail
the exchange of all relevant information about the borrower, which
would essentially be very It is important.
C. Different creditors really have different priorities in the creditor forums.
One group of lenders may generally be kind of willing to mostly wait
longer to kind of collect their debts, while another group may be
basically willing to particularly wait for a shorter timeframe in a subtle
way. may be willing to really withdraw even if the price basically is
definitely such that the risk of redemption is low, which kind of is quite
significant. Therefore, restructuring or rehabilitation strategies may
basically take time in a very big way.
D. The Corporate Debt Restructuring Mechanism was formally enacted in
2001 to immediately implement voluntary, non-legal and transparent
corporate debt restructuring programs for debts of banks and FIs over
Rs 20 million.. By using syndication/multi-banking arrangements,
banks can benefit greatly from this system by rebuilding huge standard
accounts (potentially NPAs) and viable substandard accounts. increase.

50
5.4 Recommendation based on findings
A for all intents and purposes strong banking system for the most part is very essential
for economic and very national growth, which particularly is fairly significant.
Literature suggests that the quality of a bank’s stability can literally be assessed by the
performance of its assets during financial crises, sort of contrary to popular belief.
According to this view, Indian banks generally are pretty much more particularly
effective than banks in pretty many very other countries, for all intents and purposes
contrary to popular belief. This sort of relative efficiency does not actually reflect the
definitely overall efficiency of the Indian banking sector compared to the post-
millennium era. According to data research, India\'s SCB\'s asset quality actually has
declined since the global financial crisis and recessionary conditions, which is quite
significant. The credit bubble and subsequent recessionary pressures mostly have
reduced asset quality, or so they essentially thought.
A. Intensify the management of NPAs, really contrary to popular belief. The
following things might be taken into consideration in this regard, which
actually is fairly significant. 1) Alarmingly high levels of NPAs for the most
part are burdening Indian banks, which are particularly degrading their
profitability and productivity in a subtle way. Since the post-liberalization era,
the RBI really has taken a number of steps to reduce and mostly boost NPA
profitability and productivity in the banking industry. However, present NPA
trends are unsatisfactory for the welfare of Indian SCBs, despite the fact that
the Indian banking sector has specifically remained competitive, productive,
and to a for all intents and purposes larger extent for all intents and purposes
immune to recessionary challenges than really many Asian countries,
contrary to popular belief.
B. Despite the implementation of a number of preventative measures to handle
NPAs, there was a rise in NPAs, particularly during the recession. Since the
banking industry cannot significantly affect the economic factors since they
are uncontrollable outside forces, it is crucial to create prudential measures to
lessen the stresses of a potential recession. The amount of loan losses varies
greatly amongst bank groupings.

51
C. Although the observed analysis points to considerably fairly stronger
positions than before 2007, asset quality generally has definitely declined
significantly over time kind of due to the financial crisis. Private banks, on
the other hand, actually have persevered through sort of tough economic
times, which actually is quite significant. Research has provided particularly
startling evidence that NPA reserves generally have been growing faster than
definitely total progress since 2007, or so they actually thought. Further
research really found that pretty certain banking groups specifically
outperformed others during the recession in a actually big way. Therefore, he
for the most part urges kind of more focus on proactive methods to generally
improve credit risk management in a for all intents and purposes major way.
B. Assessment of credit enhancement, loan portfolio diversification,
enhanced monitoring, post-implementation project review, and assessment of
projects by risk category, kind of contrary to popular belief. This basically is
supported by research that highlights the value of precautionary measures to
address bank NPAs in a actually major way.
D. The study kind of showed significant increases in NPAs in priority sectors,
contrary to popular belief. Lending to priority sectors for all intents and
purposes is also cited by bankers as a major cause of NPAs, or so they
generally thought. The development of priority industries should not
specifically be neglected as it also serves the purpose of the enterprise in a
major way. Banks should also literally have kind of more discretion in
choosing which projects to fund, generally contrary to popular belief.
Whether a project belongs to a priority sector should definitely be carefully
considered before making a decision based on the quality of the project and
the creditworthiness of the debtor in a subtle way.
E. Analysis reveals that borrower defaults and financial diversification
essentially are the main causes of NPAs. Inadequate monitoring and oversight
literally exacerbate this situation in a definitely big way. By hiring more
people in the credit department and giving them access to other training and
development opportunities, the problem can actually be solved on a sort of
larger scale in a very big way. This facilitates regular progress checks and

52
 ensures that the project is running as intended. A bank employee can basically
identify for all intents and purposes potential her NPAs and definitely take
fairly appropriate steps to kind of revive the project or initiate recovery in a
subtle way.
F. During the first loan appraisal process, banks should divide their clients into
several risk groups based on their quality control, SWOT analysis, etc. Any
deviation from the project's goal performance should be documented during
a project review that is conducted on a regular basis. A evaluation like this
aids financiers in determining whether or not the project has risen in risk
category. In order to prevent the asset from becoming non-performing,
bankers will be able to take corrective action as needed.

5.5Scope for future research

The study assessed the definitely current literature on NPAs and established different
approaches for assessing bank credit risk and asset quality in a definitely major way.
The study particularly revealed some characteristics of his NPA in the Indian banking
industry literally thanks to literacy ratings and expert comments in a subtle way. Future
research in this area for the most part is well supported by the background provided, or
so they really thought. To further definitely improve the really current study, additional
macroeconomic factors and bank performance indicators such as inflation, bank
network size and regional comparisons could be basically added in a subtle way.
The study provided banks and regulators with an understanding of the aspects of credit
risk to consider when making decisions and the implications for asset quality in a sort
of big way. NPA and progress generally are closely correlated, and as a result, we use
very several variables very specific to banking and economics to drive and calibrate
this relationship, or so they thought. NPAs can basically be significantly reduced if
banks design and particularly implement strategies that focus on brokering and
coordinating macroeconomic factors and bank performance indicators. Research shows
that a bank’s NPA specifically is influenced by both micro and macro factors, or so
they basically thought.

53
Public banks kind of were also the focus of this study (PSB), definitely contrary to
popular belief. We also particularly compare across all banking groups in a kind of big
way. Government NPA patterns specifically are very different when compared to kind
of private and actually international banks. Investigations of NPAs based on banking
groups may therefore for the most part be the subject of future research by new scholars,
which is quite significant. Given the globalization of banking, the results of this study
can for the most part be kind of further considered in a global setting in a for all intents
and purposes big way. The mediating and coordinating role of various banking and
economic factors particularly is the really next possible subject of investigation in a
subtle way.

5.6 Conclusion

This study for all intents and purposes focuses on bankers'' views on the occurrence and
management of NPAs in a subtle way. This data indicates that additional precautions
should generally be taken to address NPA, or so they specifically thought. A pretty few
years after the turn of the millennium, the regulator implemented important measures
kind of such as his SARFAESI law, which specifically is quite significant. While these
measures for all intents and purposes are important and kind of have greatly definitely
helped banks to kind of reduce their NPA levels, the surge in new NPAs, especially
during the financial crisis, underscores the need for efficient credit risk management
mechanisms. , or so they essentially thought.

54
 ANNEXURE

1)What is your age range?

a) Under 18

b) 18-25

c) 26-35

d) 36-45

e) 46-55

f) 56 and above

2)What is your gender?

a) Male

b) Female

c) Non-binary

d) Prefer not to say

3)Which industry do you primarily work in?

a) Banking and Finance

b) Real Estate and Construction

c) Manufacturing and Industry

d) Information Technology

e) Healthcare and Pharmaceuticals

f) Other (please specify): _____

55
4) What is your educational background?

a) High School or equivalent

b) Bachelor's degree

c) Master's degree

d) Doctoral degree

e) Other (please specify): _____

5) What is your annual income range?

a) Less than - ₹20,000

b) ₹20,000 - ₹40,000

c) ₹40,001 - ₹60,000

d) ₹60,001 - ₹80,000

e) ₹80,001 and above

6)What is your marital status?

a) Single

b) Married or in a domestic partnership

c) Divorced

d) Widowed

7)Are you a business owner or self-employed?

a) Yes

b) No

56
8)What is your level of familiarity with non-performing assets (NPAs)?

a) Very familiar

b) Somewhat familiar

c) Not familiar at all

9)Which State do you reside in?

a) Karnataka

b) Gujarat

c) goa

d) Kerala

e) Andhra Pradesh

f) Other------------

10)What is your primary investment goal?

a) Wealth preservation

b) Capital growth

c) Income generation

d) Speculative investing

57
11)How would you rate the bank's overall financial stability in [Year] with a
[Low/Moderate/High] NP ratio?

1: Very Poor

2: Poor

3: Neutral

4: Good

5: Excellent

12)How effective was the bank's risk management strategy in [Year] with a
[Low/Moderate/High] NP ratio?

1: Very Ineffective

2: Ineffective

3: Neutral

4: Effective

5: Very Effective

13)How well did the bank maintain its asset quality in [Year] with a
[Low/Moderate/High] NP ratio?

1: Deteriorated Significantly

2: Deteriorated

3: Maintained

4: Improved

5: Improved Significantly

58
14)How would you rate the bank's profitability in [Year] with a [Low/Moderate/High]
NP ratio?

1: Very Low

2: Low

3: Moderate

4: High

5: Very High

15)How satisfied are you with the bank's overall performance in [Year] with a
[Low/Moderate/High] NP ratio?

1: Very Dissatisfied

2: Dissatisfied

3: Neutral

4: Satisfied

5: Very Satisfied

16)Economic Conditions

Rate the influence of economic factors (e.g., recession, interest rates) on NPAs:

1: Minimal Impact

2: Low Impact

3: Moderate Impact

4: High Impact

5: Very High Impact

59
17) Loan Quality and Underwriting

Rate the quality of loans given out and the effectiveness of underwriting practices:

1: Excellent Quality and Underwriting

2: Good Quality, Effective Underwriting

3: Adequate Quality, Mixed Underwriting

4: Poor Quality, Inconsistent Underwriting

5: Very Poor Quality, Ineffective Underwriting

18) Regulatory Changes

Rate the impact of regulatory changes on NPAs:

1: Minimal Influence

2: Low Influence

3: Moderate Influence

4: High Influence

5: Very High Influence

19) Risk Management

Rate the effectiveness of the bank's risk management practices in preventing NPAs:

1: Excellent Risk Management

2: Good Risk Management

3: Adequate Risk Management

4: Poor Risk Management

5: Very Poor Risk Management

60
20) Borrower Profile

Rate the creditworthiness and repayment history of borrowers as contributing factors to

NPAs:

1: Very Creditworthy, Strong Repayment History

2: Mostly Creditworthy, Satisfactory Repayment History

3: Mix of Creditworthy and Risky, Varied Repayment History

4: Mostly Risky Borrowers, Weak Repayment History

5: Very Risky Borrowers, Poor Repayment History

21) (Understanding the Concept)

how familiar are you with the concept of Gross and Net Non-Performing Assets (NPAs)
in the banking sector?

a)1

b)2

c)3

d)4

e)5

1 (Not familiar at all) - 5 (Very familiar)

61
22) (Comparative Analysis)

How interested are you in comparing the Gross and Net NPAs of ICICI and HDFC
banks to understand their relative financial health?

a)1

b)2

c)3

d)4

e)5

1 (Not familiar at all) - 5 (Very familiar)

23) (Data Analysis)

To what extent do you feel comfortable in analyzing historical data to study the past
trends of NPAs in ICICI and HDFC banks?

a)1

b)2

c)3

d)4

e)5

1 (Not familiar at all) - 5 (Very familiar)

62
24) (Importance of NPAs)

How significant do you think managing NPAs is for the overall stability and
profitability of banks like ICICI and HDFC?

a)1

b)2

c)3

d)4

e)5

1 (Not familiar at all) - 5 (Very familiar)

25) (Preventive Measures)

How interested are you in exploring preventative measures that banks can take to reduce
their NPAs and enhance their financial performance?

a)1

b)2

c)3

d)4

e)5

1 (Not familiar at all) - 5 (Very familiar)

63
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