A

Project Report On

"A STUDY OF NON-PERFORMING ASSETS AND

RECOVERY MANAGEMENT"

In fulfilment of Two Years Full Time

MASTER OF BUSINESS ADMINISTRATION( MBA)

Submitted TO

Department of Management

Khandesh College Education Society’s

Institute Of Management And Research, Jalgaon

SUBMITTED BY

Under the Guidance of

Dr. Nishant Ghuge

Kaviyatri Bahinabai Chaudhari North Maharashtra University (2023-2024)

 CERTIFICATE

This is to certify that Ms Aditi Ranjit Jadhav student of Master of Business

Administration of the KCES’s Institute of Management and Research, Jalgaon has
completed project work on the topic of Analyzing Recovery Management Practices
at Bandhan Bank, Jalgaon under my guidance.

She has completed this project work in fulfillment of the requirement for Master of
Business Administration of the KBC North Maharashtra University, Jalgaon for the
academic year of 2023 - 2024.

We wish her all the success in her future endeavors.

Dr.Nishant Ghuge Dr. Parag Narkhede Dr. Mamata Dahad Prof. B.P.Pawar

Project Guide MBA Coordinator HoD Director

External Examiner 1 External Examiner 2

 DECLARATION

I, Aditi Ranjit Jadhav, a student of KCES’S Institute Of Management And

Research, Jalgaon pursuing a Master of Business Administration (MBA), hereby
declare that the Summer Internship Project report entitled " A STUDY OF NON
PERFORMING ASSETS AND RECOVERY MANAGEMENT " at (Bandhan
Bank , Jalgaon) is an authentic work carried out by me under the guidance and
supervision of Mr Devendra Kale, during the period [01/07/2023] to [01/08/203].

I further declare that this project report is based on my original work and has not
been submitted, either in part or full, for the award of any other degree or diploma
in this institution or elsewhere.

Date:

Place: Jalgaon

Ms. Aditi Ranjit Jadhav

(Exam Seat No.838196)

KCES’s IMR, Jalgaon

 ACKNOWLEDGEMENT

I express my sincere gratitude and appreciation to all those who have contributed to the successful
completion of my Summer Internship Project, entitled A STUDY OF NON-PERFORMING
ASSETS AND RECOVERY MANAGEMENT " undertaken during the [2023-24] as part of
my Masters of Business Administration (MBA) program at KCES’s Institute of Management and
Research, Jalgaon.

I would like to extend my heartfelt thanks to [Guide’s Full Name], my project guide, for his/her
invaluable guidance, mentorship, and unwavering support throughout the duration of the
internship. His/Her insights, constructive feedback, and encouragement significantly enriched my
learning experience and helped shape the quality of this project.

I would also like to express gratitude to Dr. Parag Narkhede, MBA Coordinator, and Prof. Mamata
Dahad, Head of Management Department and Prof. Dr. B.V. Pawar, Director for the
encouragement and support provided throughout the internship period.

I am also thankful to Mr/Ms. (organisation Guide) of [Company/Organization Name], for

providing me with the necessary resources, exposure, and a conducive environment to carry out
my internship. His/Her willingness to share knowledge and expertise has been instrumental in
enhancing my understanding of the practical aspects of business administration,

I appreciate the cooperation and assistance received from all those who directly or indirectly
contributed to the successful completion of this project. Their support has been invaluable in
shaping my professional growth and enhancing my practical skills.

Lastly, I would like to express my heartfelt thanks to my family and friends for their continuous
support, encouragement, and understanding throughout this internship journey.

Date: Ms. Aditi Ranjit Jadhav

Place: Jalgaon ( Exam Seat no :-838196 )

 EXECUTIVE SUMMARY

This executive summary provides a concise overview of the analysis conducted on

recovery management practices at Bandhan Bank's Jalgaon branch. The study aimed
to evaluate the effectiveness of recovery strategies employed by the bank in
addressing non-performing assets (NPAs) and mitigating credit risk.

Bandhan Bank is a renowned financial institution with a legacy of excellence in

banking services. The Jalgaon branch, situated in Maharashtra, plays a pivotal role
in the bank's operations, serving a diverse customer base. The primary objective of
the analysis was to assess the recovery management practices at the Jalgaon branch,
focusing on the identification, classification, and resolution of NPAs. The study
aimed to identify strengths, weaknesses, opportunities, and threats (SWOT)
associated with the recovery management framework.

A mixed-method approach was adopted for the analysis, combining qualitative and
quantitative research techniques. Primary data was collected through interviews
with bank officials responsible for recovery management, while secondary data was
sourced from internal reports, regulatory filings, and industry publications.

The analysis revealed several key findings regarding recovery management

practices at the Jalgaon branch, The branch demonstrated a proactive approach to
NPA identification and classification, leveraging technology and data analytics to
monitor and assess loan performance. Recovery strategies primarily focused on debt
restructuring, asset reconstruction, and legal recourse, with an emphasis on
customer-centric solutions and stakeholder engagement. Challenges were identified
in resource allocation, particularly in terms of manpower and technological
infrastructure, impacting the efficiency of recovery efforts.
 INDEX

Sr. No. Particulars Page No.

1 Introduction 07

2 Bank Profile 09

3 Research Methodology 13

4 Introduction of Topic 18

5 Recovery Management of NPA 25

6 Data Analysis & Interpretation 31

7 Findings, Suggestions and Conclusion 44-46

I. Bibliography 47

8 Annextures 48
 CHAPTER – 1

INTRODUCTION

With the growing competition in the market and globalization coming into role it has
become essential for every bank to keep in touch with the recent technology. My subject of project
mainly targets the NPAs in banks & recovery process thus adopted. thus for a bank to survive in
the market it is very essential to stick to the rules and regulations of RBI, as it is the governing
body of every nationalized bank.

In the present economic scenario, we here many things of banks getting close due to high
percentage of NPA. So the question comes in mind, that, what is NPA? NPA is an asset, which
ceases to generate income to the bank. It is basically a loan for which the interest or installment
or both remains unpaid for period of 180 days. Thus to keep a track on the increasing amount of
NPAs, Banks have set up recovery departments. Bandhan Bank where I completed my project is
also one of them Recovery is the most important department of bank.

In many financial services recovery forms the heart of its operation without which the
organization can’t survive. If there is no satisfactory recovery the organization will become sick.
Bandhan Bank has a very efficient recovery department. It has a team of expert controlling the
recovery of loans. Who are equipped with very good system, This helps in one side the normal
recovery and on the other side also in timely identification of default cases. The department acts
in more proactive manner than reactive.
With today’s world getting close and considering the world as global Village Bandhan
Bank has been successful in expanding its wings by opening new branches and updating
themselves with the latest technologies.
CHAPTER – 2

BANK PROFILE

INTRODUCTION
 On August 23, 2015, Bandhan Bank was born with a
bouquet of products for customers in all segments. In its
journey from an NGO to an NBFC and finally a universal
bank, the objective has remained reaching out to the
unbanked and the under-banked and providing last-mile banking for all, big or small. Driven by
the philosophy of ‘Aapka Bhala. Sabki Bhalai.’, (Your benefit. Everyone’s welfare.) Bandhan
Bank’s core purpose has graduated from financial inclusion to inclusive banking.

It all began in the 1990s, when Chandra Shekhar Ghosh observed the plight of Kolkata’s small-
time traders. To grow their businesses, they had no option except high-interest loans from
traditional moneylenders. His deep desire to help these marginal business owners led to the
creation of Bandhan, a microfinance institution providing loans – and hope – to the poorest. In a
decade and a half, Bandhan made history by transforming into a universal bank that serves all
socio-economic sections across the country. Today, Bandhan has truly expanded, but its mission
remains the same – to build a financially-inclusive India.

Bandhan Bank is a commercial bank headquartered in Kolkata, West Bengal, India. Established
in 2015, it began as a microfinance institution (MFI) and later transformed into a full-fledged
universal bank. Bandhan Bank primarily focuses on serving underbanked and unbanked segments
of society, especially in rural and semi-urban areas.

Founding and History:

 Bandhan Bank was founded by Mr. Chandra Shekhar Ghosh, a social entrepreneur, in
2001 as a microfinance institution named Bandhan Financial Services Limited.

 In 2014, Bandhan Financial Services received approval from the Reserve Bank of India
(RBI) to set up a universal bank, leading to the establishment of Bandhan Bank in 2015.

 The bank commenced its operations with 501 branches, 50 ATMs, and 2,022 Doorstep
Service Centers (DSCs), focusing on financial inclusion and serving the unbanked
population.
Mission and Vision:

 Bandhan Bank's mission is to be the preferred bank for inclusive and sustainable
development, providing a wide range of financial products and services tailored to meet
the needs of its diverse customer base.

 The bank's vision is to build a robust and customer-centric institution that fosters financial
empowerment, social upliftment, and economic growth across India.

Key Services:

1. Savings and Current Accounts: Bandhan Bank offers a variety of savings and current
account options with competitive interest rates and convenient banking features.

2. Loans and Advances: The bank provides a wide range of loan products, including home
loans, personal loans, business loans, and agricultural loans, to support various financial
needs.

3. Deposits: Bandhan Bank offers fixed deposits, recurring deposits, and other deposit
schemes with attractive interest rates and flexible tenure options.

4. Digital Banking: The bank provides digital banking services, including internet banking,
mobile banking, and online fund transfer facilities, to enhance customer convenience and
accessibility.

Social Initiatives:

 Bandhan Bank remains committed to its social mission of poverty alleviation and
empowerment of marginalized communities. It continues to support various social
development programs and initiatives aimed at promoting financial literacy, education,
healthcare, and women's empowerment.

Recognition and Awards:

 Bandhan Bank has received several accolades and awards for its contributions to financial
inclusion, microfinance, and social impact. These include recognition from organizations
such as the World Bank, International Finance Corporation (IFC), and the Microfinance
Institutions Network (MFIN).
Bandhan Bank's journey from a microfinance institution to a universal bank reflects its
unwavering commitment to financial inclusion and social development. With a customer-centric
approach, innovative solutions, and a focus on social impact, the bank continues to play a pivotal
role in driving inclusive growth and economic prosperity across India.
 CHAPTER – 3

RESEARCH

METHODOLOGY

Introduction
In the realm of banking, the ability to navigate through financial challenges with agility and
foresight is paramount. For Bandhan Bank, a premier financial institution with a legacy spanning
nearly a century, recovery management is not just a process; it's a commitment to resilience,
innovation, and unwavering customer trust. Let's delve into the concept of Bandhan Bank's
recovery management and explore how it sets sail towards financial stability amidst turbulent
waters.

Recovery management in banking encompasses

a set of proactive measures and reactive
strategies aimed at managing and recovering
NPAs. NPAs are loans or advances where
borrowers have defaulted on repayments for a
specified period, posing a significant risk to the
bank's asset quality and financial stability.
Recovery management steps in to mitigate this
risk and salvage the situation through various
means. At the heart of Bandhan Bank's
operations lies a robust recovery management
framework designed to effectively address non-performing assets (NPAs) and mitigate credit risk.
Recovery management encompasses a suite of strategies and mechanisms aimed at reclaiming
funds from NPAs while preserving asset quality and fostering long-term financial sustainability.

Banks employ a spectrum of recovery strategies to reclaim funds from NPAs and minimize credit
risk. These strategies include debt restructuring, asset reconstruction, legal recourse through
mechanisms like the Securitization and Reconstruction of Financial Assets and Enforcement of
Security Interest (Sarfaesi) Act and the Insolvency and Bankruptcy Code (IBC), and engagement
with Debt Recovery Tribunals (DRTs). Each strategy serves as a compass guiding banks towards
the destination of financial recovery.

While the pursuit of recovery is paramount, banks must strike a delicate balance between
aggressive recovery measures and maintaining customer relationships. Empathetic engagement
with distressed borrowers, offering rehabilitation options, and ensuring transparency in recovery
processes foster trust and goodwill, essential for long-term sustainability.

Primary Data
  Discussion with Branch manager and staff of Bandhan Bank, Jalgaon branch
 Company profile and Banks annual reports

Secondary Data

 Reference Books
 Bank website (https://www.bandhanbank.com/)
 Past reports and references material from Library

 OBJECTIVES OF THE STUDY

 To know the performance of organization related to non-performing asset
compare to past years.
 To study the various steps taken by the bank to bring down the NPA’s in
respective bank branches.
 To know the impact of Non-Performing Assets on profitability
 To recommend measures for improving performance and reduction of Non-
Performing Assets.
 To know the concept of NPA

 LIMITATION OF THE PROJECTS

 As per the bank’s policy there are restrictions on disclosing some information.
 The information system is confidential and hence the banks records were not
fully disclosed.
 The study can give only general idea about the NPAs.

SWOT Analysis

Bandhan Bank's recovery management framework possesses

notable strengths such as a customer-centric approach and
technological integration; it also faces challenges such as resource
constraints and external dependencies. By capitalizing on
opportunities for innovation and adapting to evolving market
dynamics, the bank can mitigate threats and further strengthen its recovery management
capabilities.

Strengths:

1. Customer-Centric Approach: Bandhan Bank has a strong focus on maintaining

positive customer relationships during the recovery process, offering personalized
solutions and support to distressed borrowers.

2. Legacy and Experience: With a history dating back to 2015, Bandhan Bank possesses
a rich legacy and extensive experience in the banking industry, providing valuable
insights and expertise in recovery management.

3. Technological Integration: The bank leverages advanced technologies such as data

analytics and artificial intelligence to enhance recovery management processes,
enabling efficient identification of NPAs and prioritization of recovery efforts.

4. Compliance and Governance: Bandhan Bank adheres to stringent regulatory

requirements and governance standards, ensuring transparency, accountability, and
integrity in its recovery management practices.

Weaknesses:

1. Limited Resources: Resource constraints, including budgetary limitations and access

to expertise, may impact the bank's capacity to invest in advanced technologies and
human resources required for effective recovery management.

2. Dependency on External Factors: The effectiveness of recovery management may

be influenced by external factors such as changes in economic conditions, regulatory
environment, and market dynamics, which are beyond the bank's control.

Opportunities:

1. Innovation in Recovery Strategies: Bandhan Bank has the opportunity to innovate

and develop new recovery strategies leveraging emerging technologies and best
 practices, thereby enhancing the efficiency and effectiveness of its recovery
management framework.

2. Expansion of Digital Channels: With the growing trend towards digital banking, the
bank can expand its digital channels and platforms for communication, education, and
support to borrowers, facilitating easier access to recovery assistance.

Threats:

1. Intense Competition: The banking industry in India is highly competitive, with

numerous players vying for market share. Intense competition may pose challenges for
Bandhan Bank in retaining customers and attracting new business, potentially
impacting recovery management efforts.

2. Economic Volatility: Economic volatility and fluctuations in key macroeconomic

indicators such as GDP growth, inflation, and interest rates can impact borrowers'
ability to repay loans and increase the likelihood of NPAs, posing a threat to recovery
management.

3. Regulatory Changes: Changes in regulatory requirements or policies governing

recovery management, including amendments to the Sarfaesi Act or the IBC, may
impact the bank's ability to recover NPAs efficiently and comply with regulatory
mandates.
 CHAPTER – 4

INTRODUCTION OF TOPIC
Introduction

In the dynamic landscape of banking and finance,

Study of Non Performing Assets, recovery
management stands as a critical pillar supporting
the stability and resilience of financial
institutions. It encompasses a set of strategies,
processes, and mechanisms employed by banks
and other lending institutions to address non-
performing assets (NPAs) and mitigate credit risk
effectively. Recovery management plays a pivotal
role in safeguarding the financial health of banks, preserving asset quality, and fostering
sustainable growth in the face of economic uncertainties and borrower defaults.

The sustained policy focus to strengthen the banking sector has yielded positive outcomes.
Reforms implemented by the government and the RBI have also prompted greater focus
on improving asset quality, with the gross nonperforming assets (GNPA) ratio reaching a
ten-year low of 3.9% in March 2023. Net non-performing asset also improved to 1% in
March 2023, a level last seen in June 2011. Additionally, stress tests confirm that the banks
are well capitalized and capable of withstanding adverse macroeconomic conditions. The
GNPA ratio is expected to further decline to 3.6% by March 2024.

Non-Performing Assets (‘NPAs’) continue to recover post pandemic jitters – Both gross
non-performing asset (‘GNPA’) and net non-performing assets (‘NNPA’) moved to multi-
year lows in FY 2022-23. Total NPA as at March 31, 2023: `5298.62 Crores Provision for
NPA as at March 31, 2023: `4070.35 Crores.

With the restoration of people’s livelihoods, the Bandhan Bank has observed a strong
inclination among customers to regularize their accounts, maintain a healthy credit record
and ensure continued access to formal credit. In line with this, the Bank has achieved an
overall collection efficiency (excluding NPA) of 98.5% in the month of March 2023. In
the year in review, the Bank also received a sum of ₹917 crore from the government as
part of the Credit Guarantee Fund for Micro Units (CGFMU).

Bandhan Bank’s efforts towards tightening underwriting standards and managing asset
quality have yielded positive results. As of March 31, 2023, Gross NPA stood at 4.9%,
showing a sharp improvement from 6.5% a year back. Furthermore, Net NPA stood at
1.2% as of March 31, 2023, compared to 1.7% in the same period of the previous year.
These figures reflect the Bank’s commitment to maintaining a healthy loan portfolio and
managing credit risks effectively.

Recovery management serves as a cornerstone of financial stability and resilience for

banks and lending institutions. By adopting proactive recovery strategies, leveraging legal
frameworks, and prioritizing customer relationships, banks can navigate through financial
challenges with confidence and emerge stronger in the face of adversity. As the banking
landscape continues to evolve, recovery management remains an indispensable aspect of
banking operations, ensuring the sustainability and growth of financial institutions in an
ever-changing economic environment.

The journey of recovery management begins with the identification of NPAs, which are
loans or advances where borrowers have defaulted on repayment obligations for a
specified period. Accurate and timely identification of NPAs is crucial for banks to initiate
appropriate recovery measures promptly. Recovery management involves the formulation
and execution of various recovery strategies aimed at reclaiming funds from NPAs. These
strategies may include debt restructuring, asset reconstruction, recovery through legal
means, and engagement with asset reconstruction companies (ARCs).
Effective recovery management is intertwined with risk mitigation efforts, as banks seek
to minimize credit risk and preserve asset quality. Stringent risk management practices,
continuous credit monitoring, and adherence to regulatory guidelines are essential for
mitigating risks associated with NPAs. While pursuing recovery of NPAs, banks must
strike a delicate balance between aggressive recovery measures and maintaining positive
customer relationships. Empathetic engagement with distressed borrowers, offering
rehabilitation options, and ensuring transparency in recovery processes are vital for
preserving customer trust and loyalty.

The process of recovery management

In banking involves a series of steps aimed at addressing non-performing assets (NPAs)

and mitigating credit risk effectively. The recovery management process at Bandhan Bank
involves a structured approach aimed at addressing non-performing assets (NPAs)
efficiently while mitigating credit risk and preserving asset quality. Here's an overview of
Bandhan Bank's process of recovery management:

 Identification of Non-Performing Assets (NPAs): The process begins with the

identification and classification of NPAs within Bandhan Bank's loan portfolio. NPAs
are categorized based on the severity of default and the likelihood of recovery,
following regulatory guidelines and internal risk assessment criteria.
 Classification and Categorization: Once identified, NPAs are classified based on
their severity and recovery potential. They may be categorized as Substandard,
Doubtful, or Loss assets, depending on the extent of default and the likelihood of
recovery. A thorough risk assessment is conducted to evaluate the potential impact of
NPAs on the bank's financial health and asset quality. This involves analyzing factors
 such as the outstanding loan amount, collateral value, borrower's financial position,
and market conditions.
 Risk Assessment: A comprehensive risk assessment is conducted to evaluate the
potential impact of NPAs on the bank's financial health and asset quality. This
involves analyzing factors such as the outstanding loan amount, collateral value, and
borrower's financial position.
 Formulation of Recovery Strategies: Based on the risk assessment, recovery
strategies are formulated to reclaim funds from NPAs and minimize credit risk. These
strategies may include debt restructuring, asset reconstruction, legal recourse, and
engagement with asset reconstruction companies (ARCs).
 Debt Restructuring: Debt restructuring involves renegotiating the terms of the loan
to make it more manageable for the borrower. This may include extending the
repayment period, reducing the interest rate, or providing a moratorium on payments.
ebt restructuring involves renegotiating the terms of the loan to facilitate repayment
by the borrower. Bandhan Bank may extend the repayment period, lower the interest
rate, or provide other concessions to make the debt more manageable.
 Asset Reconstruction: In cases where debt restructuring is not feasible, Bandhan
Bank may opt for asset reconstruction by selling NPAs to ARCs. ARCs specialize in
acquiring distressed assets and recovering dues through asset reconstruction or sale.
 Legal Recourse: Bandhan Bank utilizes legal mechanisms such as the Sarfaesi Act
and the IBC to enforce security interests and recover dues from defaulting borrowers
through non-judicial and judicial routes, respectively. Legal actions are initiated as
per regulatory requirements and in accordance with the bank's internal policies.
 Engagement with Debt Recovery Tribunals (DRTs): Bandhan Bank may engage
with Debt Recovery Tribunals (DRTs) and other debt recovery mechanisms to
expedite the resolution of NPA cases. This involves presenting the case before the
tribunal and seeking legal remedies for recovery.
 Monitoring and Follow-Up: The recovery process requires continuous monitoring
and follow-up to ensure timely execution of recovery strategies and track progress.
 Banks maintain regular communication with borrowers, legal counsel, and other
stakeholders involved in the recovery process.
 Closure and Resolution: Once recovery efforts are successful, NPAs are resolved,
and the recovered funds are reflected in the bank's financial statements. In cases
where recovery is not feasible, NPAs may be written off or provided for as per
regulatory guidelines.
 Continuous Improvement: Bandhan Bank continuously reviews and refines its
recovery management strategies to enhance effectiveness and adapt to changing
market conditions and regulatory requirements. Lessons learned from previous
recovery experiences are incorporated to improve future recovery outcomes.

By following a systematic approach to recovery management, banks can effectively

address NPAs, mitigate credit risk, and maintain financial stability, thereby safeguarding
the interests of depositors, shareholders, and other stakeholders.

for raising NPA’s-

The concept of NPA came into talk during the Prime Minister Mr.P.V.Narsimha Rao’s
tenure. Narshima Committee. Since 01.04.92, advised banks to classify accounts as per
IRAC (Income recognition and Asset Classification) norms.
On implementation of IRAC norms most banks were forced to shut their business and
heir losses increased to huge extent.
During the last tow decades or so, recovering of loans/advances has become a major
problem for the banking industry. More and more borrowers are tuning defaulters taking
advantage of the inherent deficiencies in our legal system. The problem of recovery has
been further aggravated by the external factors like the government loan
Waiver scheme apart from this. Some other causes for loans accounts turning NPA’s
are:-
From Borrower’s side-
 Lack of owner stake or no stake at all
 Highly ambitious projects
 Longer gestation period
 Lack of planning
 Infrastructural bottlenecks
  Lack of experience
 Unremunerative purchase
 Unhealthy competition
 Low capacity utilization
 Low-cost consciousness
 Financial indiscipline
 Unexpected adverse development in external environment
 Death of key personnel
 Diversion of funds, mostly for expansion/diversification of business or for
promoting associate concerns.

 Time/cost overruns during project implementation.

From Banks side-

 Wrong selected of borrowers

 Delay in sanction
 Unhelpful/rigid attitude the absence of portfolio concentration limits
 Poor industry analysis
 A cursory financial analysis of borrower.
 A excessive reliance on collateral security
 In frequent customer contact
 Inadequate check and balance in credit process
 The absences of loan supervision
 Poor control on loan documentation, excessive overdraft lending
 Improper assets classification and loan-loss provisioning standard
 Too flexible, permitting too many deviation
 Lack of quick judicious decision making at various level
 CHAPTER- 5

RECOVERY MANAGEMENT

OF NPA
NPA management is a matter of concern to the entire banking industries .before drawings up a
proper plan for the recovery of NPA’s one has to see the back ground of an NPA and the reasons
for its origin. A lot of NPA’s result from lack of proper monitoring and control. There are
NPA’s, which occurs due to factors beyond the control of the borrowers. Sometimes, NPA’s
occurs due to diversion of fund by the borrower. But, effective monitoring and control with
defiantly restrict NPA’s the following are some suggested remedies for reduction of NPA’s

Preventive measures-
 Proper selection of borrower/activity

 Financing only viable schemes

 Extending need based finance

 Ensuring proper end-use

 Proper post sanction follow up

 Regular contact with borrowers

 Regular monitoring of accountant

 Avoiding over drawings

Corrective Measures-
 Recovery

 Rephasement

 Rehabilitation

 Holding of recovery camps

Drastic Measures-

 Enforcement of primary securities charge to the bank

 Filling of suit

 Through qualitative lending correct execution of loaning documents and proper charging of
securities binds the borrowers to repay banks dues and helps in recovery can be accelerated
at a much faster pace through effective.
 Supervision

 Follow up.
Supervision
Supervision of advances by banking officials includes:

 Ensuring proper end use of fund and creation of assets out of loan/credit/margin/subsidies
within the anticipated periods and compliance of all term and conditions stipulated in the
sanction

 Timely and theoretical inspection of the securities charge to bank

 Proper watch on the conduct of the borrower and operations in the accounting the various
segments such as ledger/bills/godowns

 Proper maintenance of requisites record for limitation, insurance due dates, mutation/nothing
of banks lien, inspection, field visit village wise and Irregularity – voice master charts, etc.
so that follow-up of supervised advances cost effective and efficient.

Timely receipt, proper scrutiny and interpretation of data to a ascertain short coming in
hypothecation stock statement/monthly select operation data/quarterly information system
return(as per chore committee) submitted by borrower at the prescribed intervals

 Constant touch with persons trading which the borrower to obtain market report in regard
to his trade dealings, solvency, etc.

Follow up

In the case of deficiencies/irregularities observed, the borrower concerned/department should be

vigorously followed up for rectification of these irregularities.

 Issue of reminders/notice for deposit of installment, overdue interest, over drawings and for
realization of overdue bills etc. to the borrowers at the appropriate time.
 Personal contacts with the borrowers intervals.
 In the case of defaulter in rural areas, letter may be return with full particulars of the
borrower to the manger of bank branch and secretary of primary agriculture credit society
in whose service area the borrower resides/operators the activity, with copies to the:

 Controlling officer of the addresses bank/society

 Lead back officer of the district

 Banks on district coordinator

Recovery from NPA’s: A few concerns

 Whether banks go in for setting up of recovery branches or not, what is more important is
to strengthen the recovery machinery. In this regard, a few aspects of the problem need to
 the work and should be considered on priority basis. Finally, branches, which required
close, monitoring, also need to be prioritized.

 Diagnostic study has to be considered by each bank in respect of cases lost in the court of
law during the recent past. The study should highlight the nature of deficiencies found by
the court authorities in evidences, claims & procedures. Conclusion of the study will help
strengthening the recovery system.

 Involvement of lawyers in suit field cases should be given utmost importance

unfortunately, they seem too busy and, therefore, bank cases are not monitored timely. In
this regard, the presence system of empanelment of lawyers need fresh look. Similarly,
some incentive schemes should be worked out so that efficient lawyer rewarded
adequately.

 Enforcement of securities has been one of the problems of the areas this requires certain
expertise and contacts with the local people; police department etc. to supplement banker’s
efforts, services of out side professionals may be employed. But it should be ensured that
such professional do not take up un lawful measures in taking possessions of securities in
the few up raising number of decreed cases, certain schemes have to be worked out to
involve professionals in the enforcement of securities.

 It is suggested that banks may jointly promote a subsidiary to act as assets recovery
agency. It can purchase decreed debts at certain discount. Thereafter, it

Should be able to recover the dues fully from the borrowers by creating professional expertise,
and infrastructure, developing contact, etc. finally it should work as a profit- making ventured.
This wills substitute the proposed idea of setting up of assets reconstruction funds.

 The least of innovative schemes could be long. if this are implemented, reduction in NPA’s
may be take place. But it should be ensure that there would be no more addition to the list
of NPA’s in the future.
The present system of interviewing a borrower, at the time of credit sanction should be made
more meaning full. It can be ensure to elect the necessary information about the managerial,
competence, professional background of an entrepreneur, planning, but getting an control
system, decision-making system, development of staff, etc. with the growing complexities of
business and different risk associated with that lending, it has became essential to upgrade the
quality of appraises for which extensive use of computers in lending area on once hand and
creation of specialized credit appraisal cadre for different industries on the other, are called for
.finally, the concept of accountability has to be introduces in management of lending. In this
regard cover corporate office has to work out certain arrangements whereby delegation of
authority and accountability go hand in hand.

Need for recovery

 In the wake of financial sectors reforms, generation of profit is the main concern of
banks, in this respect, the Narshima committee is of the opinion that this viability banks should
be the sole criterion for survival and growth in the competitive environment. For this purpose,
each bank has to maintain low risk bearing advances .hence, the paramount task before banks is
to bring down non-performing advances this can as well be done by writing off NPA’s which is
not feasible due to low profitability of banks. So, they have to concentrate basically on recovery
in the last
Year, significant changes have taken place in system and arrangements relating to recovery of
NPA’s. consequently, the percentage of NPA’s to total advances in Kotak Mahindra Bank has
declined from 7.00% to 5.53%.(i.e. the ratio gross NPA’s to grows advances, the ratio of net NPA
to net advances has been reduced from 2.15% to 2.03% in 2009-2010 further, analysis of
achievements of targets set under mouse shows that there are four areas in which banks made
considerable progress, & reduction in NPA’s is one of them. But banks have yet to go a long way
to make full recovery from NPA’s every bank has its own policy for recovery .accordingly, Kotak
Mahindra Bank also has its own policy for recovery.
 CHAPTER- 6

DATA ANALYSIS

AND INTERPRETATION
Case Study 1: Empathetic Recovery Assistance

Background: Mr. Sharma, a small business owner, had availed a loan from Bandhan
Bank's Jalgaon branch to expand his business. However, due to unforeseen market
challenges, Mr. Sharma's business suffered losses, making it difficult for him to meet his
loan repayment obligations.

Recovery Approach: Instead of resorting to aggressive recovery tactics, the recovery

team at Bandhan Bank's Jalgaon branch took an empathetic approach towards Mr.
Sharma's situation. They initiated a dialogue with Mr. Sharma to understand his challenges
and financial constraints.

Actions Taken:

1. Personalized Solutions: The recovery team worked closely with Mr. Sharma to devise
personalized solutions tailored to his financial situation. They explored options such
as debt restructuring, loan rescheduling, and extended repayment terms to ease Mr.
Sharma's burden.

2. Financial Counseling: Recognizing the importance of financial literacy, the bank

provided Mr. Sharma with financial counseling and guidance to help him manage his
finances effectively. They offered insights on budgeting, cash flow management, and
strategic planning to improve his business prospects.

3. Supportive Communication: Throughout the recovery process, the bank maintained

open and supportive communication with Mr. Sharma, keeping him informed about
his options and progress. They reassured him of their commitment to finding a
mutually beneficial solution.

Outcome: As a result of the empathetic recovery assistance provided by Bandhan Bank's

Jalgaon branch, Mr. Sharma felt supported and motivated to overcome his financial
challenges. He successfully availed of the debt restructuring facility and resumed his loan
repayments, gradually stabilizing his business operations.

Case Study 2: Transparent Communication

Background: Ms. Patel, a salaried individual, had availed a personal loan from Bandhan
Bank's Jalgaon branch for her daughter's education purpose. However, due to unexpected
medical emergencies in the family, Ms. Patel faced difficulties in repaying the loan on
time.

Recovery Approach: In this case, the recovery team at Bandhan Bank's Jalgaon branch
prioritized transparent communication and empathy while engaging with Ms. Patel to
address her repayment challenges.

Actions Taken:

1. Clear Information Sharing: The recovery team provided Ms. Patel with clear and
transparent information about her loan status, outstanding dues, and available options
for resolution. They explained the implications of non-repayment and the
consequences of various recovery measures.

2. Flexible Repayment Options: Understanding Ms. Patel's financial constraints, the

bank offered flexible repayment options, including a moratorium on payments,
revised installment plans, and interest rate concessions. They ensured that the
solutions proposed were feasible and aligned with Ms. Patel's financial capacity.

3. Assistance with Documentation: The recovery team assisted Ms. Patel with the
necessary documentation and paperwork required for availing of the repayment
options offered. They simplified the process and guided her through each step to
ensure a smooth and hassle-free experience.

Outcome: Through transparent communication and empathetic support from Bandhan

Bank's Jalgaon branch, Ms. Patel felt reassured and empowered to address her loan
repayment challenges effectively. She opted for a revised installment plan that suited her
financial situation, enabling her to fulfill her repayment obligations without undue stress.

Case Study 3: Proactive Debt Restructuring for a Small Business Owner

Background: Mr. Deshmukh, the proprietor of a local manufacturing unit, faced financial
difficulties due to a sudden downturn in the market. As a result, he struggled to repay his
business loan availed from Bandhan Bank's Jalgaon branch.

Recovery Approach: Recognizing Mr. Deshmukh's genuine intent to repay his dues
despite his current financial constraints, the recovery team at Bandhan Bank's Jalgaon
branch decided to take a proactive approach towards debt restructuring.

Actions Taken:

1. Understanding Financial Constraints: The recovery team conducted a thorough

assessment of Mr. Deshmukh's financial situation, including his business cash flow,
outstanding debts, and market challenges.

2. Tailored Debt Restructuring Plan: Based on the assessment, the recovery team
proposed a tailored debt restructuring plan that included extending the loan tenure,
reducing the interest rate, and providing a moratorium on principal payments.

3. Empathetic Communication: Throughout the process, the recovery team maintained

open and empathetic communication with Mr. Deshmukh, understanding his
concerns and providing reassurance about the bank's support.

Outcome: As a result of the proactive debt restructuring efforts by Bandhan Bank's

Jalgaon branch, Mr. Deshmukh was able to stabilize his business operations and gradually
recover from the financial setback. He resumed his loan repayments as per the revised
schedule, fostering a positive relationship with the bank.

Case Study 4: Collaborative Recovery Approach with a Retail Borrower

Background: Ms. Gupta, a retail borrower, faced a temporary setback in her financial
situation due to unexpected medical expenses. She struggled to meet her loan repayment
obligations to Bandhan Bank's Jalgaon branch.

Recovery Approach: Understanding Ms. Gupta's genuine intent to repay her loan and her
temporary financial constraints, the recovery team at Bandhan Bank's Jalgaon branch
adopted a collaborative approach towards recovery.

Actions Taken:

1. Exploring Flexible Repayment Options: The recovery team worked closely with Ms.
Gupta to explore flexible repayment options, such as a temporary moratorium on
payments, revised installment plans, and interest rate concessions.

2. Financial Counseling and Budgeting Assistance: Recognizing the importance of

financial literacy, the bank provided Ms. Gupta with financial counseling and
budgeting assistance to help her manage her expenses and prioritize loan repayments.

3. Empowering Ms. Gupta: Instead of imposing strict recovery measures, the recovery
team empowered Ms. Gupta to take charge of her financial situation by providing her
with the necessary support and guidance.

Outcome: Through the collaborative recovery approach adopted by Bandhan Bank's

Jalgaon branch, Ms. Gupta felt supported and motivated to overcome her financial
challenges. She successfully availed of the flexible repayment options offered by the bank,
gradually restoring her financial stability and honoring her loan commitments.
 1) Table showing the percentage of Net NPA
% of Net NPA = Net NPA/Gross NPA*100
Rs. in million

Years Total Net NPA Total Gross NPA Percentage

2023 1228.27 5298.62 1.17 %

2022 1564.23 6380.00 1.66%

2021 2861.03 5757.76 3.51%

2) Graph showing the Percentage of Net NPA
Analysis :
From the above information, we can see that in the Year 2021 Net
NPA over gross NPA is 3.51% . and In the year 2022 it was decreased
to 1.66% and again it was decreased to 1.17%

3) Amount of non-performing assets as at 31st March, 2021

Items Gross NPA Net NPA

Substandard Asset 14,901 9,903

Doubtful 1 8,589 3,475

Doubtful 2 17,655 3,579

Doubtful 3 5,020 -

Loss 1,725 -

Total 47,892 16,598

Above table shows the values of 4 categories of NPA such as

Substandard asset , Doubtful asset, Loss asset, and Standard asset.

For the year 2021

 4) Amount of non-performing assets as at 31st March, 2021

Items Gross NPA Net NPA

Substandard Asset 21,022.4 11,405.6

Doubtful 1 8,768.0 3,494.9

Doubtful 2 12,746.8 2,547.6

Doubtful 3 7,084.2 -

Loss 5,255.2 -

Total 54,876.6 17,448.1

Above table shows the values of 4 categories of NPA such as

Substandard asset , Doubtful asset, Loss asset, and Standard asset.

For the year 2021

 5) Amount of non-performing advances as at 31st March,
2022

Items Gross NPA Net NPA

Substandard Asset 38,584.5 23,003.8

Doubtful 1 16,232.7 6,051.5

Doubtful 2 9,289.0 1,999.7

Doubtful 3 9,658.5 -

Loss 8,998.2 -

Total 82,672.9 31,055.0

Above table shows the values of 4 categories of NPA such as

Substandard asset , Doubtful asset, Loss asset, and Standard asset.

For the year 2022

39
 6) Analysis of Advances and Deposits :-
(Rs. in thousands)

Year Deposits Advances

2022 2,628,205,199 2,197,481,867

2023 2,801,000,452 2,236,886,221

Interpretation :-

In the year 2021 the Deposits was Rs.2,628,205,199 thousands and

in the year 2022 deposits increased to Rs.2,801,000,452 thousands.

In the year 2021 the advances was Rs.2,197,481,867 thousands and

in the year 2022 it is increased to Rs.2,236,886,221 thousands.

From the above chart, it can be conclude that the deposites of bank

increased because bank has provided better interest rate to the customers.

40
Deposits and advances have increased because bank has charged less

interest rate from customers and provided better services to them.

7) CASE STUDY :(DATA ANALYSIS)

The net non-performing assets ratio of Bandhan Bank was about

1.2 percent in financial year 2022. This came from over 17 billion Indian
rupees of net NPA. Bandhan was one of the leading private sector banks across
India.
Data Analysis:

NPA Ratios MAR’23 MAR’22 MAR’21

Gross NPA 5298.62 6380.00 5757.76

Net NPA 1228.27 1564.23 2861.03

% of Gross NPA 4.87 6.00 7.00

% of Net NPA 1.17 1.66 3.51

Net NPA to 1.17 2.00 4.00

Advances%

41
INTERPRETATION:
Gross NPA refers to the entire amount of debts that an organization
has not collected or the individuals owing the organization has not fulfilled
their contractual obligations to pay both the amount of principal and interest.
Gross NPA = (A1 + A2 + A3 ...................................+ An)/Gross Advances
Here A1 is the person who has taken the loans.

Net NPA = (Total Gross NPA) - (Provision for Unpaid Debts)/Gross Advances.
From data above, Gross NPA keeps on increasing from MAR’21 to
MAR’23. It is jumped from 5,757.76 (MAR’21) to 5,298.62 (MAR’23). A
very high gross NPA ratio means the bank’s asset quality is in poor shape.
Here, Bandhan Bank’s

42
 CHAPTER – 7

FINDING, SUGGESTIONS

CONCLUSION,

43
 FINDINGS

The findings of the study on Bandhan Bank's recovery management practices at its
Jalgaon branch reveal several key insights into the bank's approach, effectiveness, and
areas for improvement. Here are the main findings:

 The study found that Bandhan Bank's recovery management at the Jalgaon branch is

characterized by a customer-centric approach, focusing on understanding borrowers'

financial challenges and providing personalized solutions.

 The Gross NPA to Gross Advances as of March 2023 is 4.87%, whereas it was 6.00%

in the year 2020-22 and 7.00% in the year 2020-21.

 Net NPA to Net Advances as of March 2023 is 1228.27%, whereas it was 1.66% in

the year 2020-22 and 1,564.23% .

 Closing balances of provision for NPAs include CGFMU claims received (net) and

held pending adjustment of ₹ 717.05 crore.

 The net NPA ratio of Bandhan Bank stood at 2.21% in Q3FY23, while it was 2.32%

in Q2FY23. The PE ratio of the stock is 10.67, while the firm has a market cap of Rs

31,823 crore. City Union Bank reported a net NPA of 2.19% in Q3 of the financial

year 2024, while the net NPA in Q2FY23 was 2.34%.

44
 SUGGESTIONS

Based on the findings of the study on Bandhan Bank's recovery management practices at
its Jalgaon branch, several suggestions can be proposed to enhance the effectiveness and
efficiency of the recovery process. These suggestions aim to address the identified
challenges and build upon the strengths of the bank's recovery management framework.
Here are some recommendations:

 Bandhan Bank should prioritize investments in technology upgrades to enhance the

efficiency of recovery operations. Implementing advanced data analytics tools and
digital platforms can facilitate the identification of NPAs, improve communication with
borrowers, and streamline recovery processes.
 The bank should focus on enhancing human resource development by providing
training programs and skill development initiatives for recovery staff. Training sessions
on negotiation techniques, conflict resolution, and empathetic communication can
equip employees with the necessary skills to handle recovery cases effectively.
 Strengthening collaboration with external stakeholders, such as legal counsel, asset
reconstruction companies, and regulatory authorities, can expedite the resolution of
NPAs. Bandhan Bank should foster closer partnerships with these stakeholders to
leverage their expertise and resources in recovery efforts.
 The bank should adopt proactive recovery strategies to prevent NPAs from escalating
and minimize credit risk. This could include early identification of potential defaulters,
proactive engagement with borrowers at risk, and offering preemptive solutions to
address financial challenges before they escalate.
 Bandhan Bank should create platforms for sharing success stories, promoting
innovative ideas, and recognizing employees who contribute to enhancing recovery
outcomes.

45
 CONCLUSION

The study on Bandhan Bank's recovery management practices at its Jalgaon branch
provides valuable insights into the bank's approach, effectiveness, and areas for
improvement. Bandhan Bank's recovery management demonstrates a strong emphasis on
understanding borrowers' needs and providing personalized solutions, reflecting a
commitment to customer satisfaction and support. The recovery team at the Jalgaon branch
exhibits empathy and support towards borrowers facing financial difficulties, fostering
trust and cooperation throughout the recovery process.

Addressing challenges in resource allocation, particularly in manpower and technological

infrastructure, will enhance the efficiency and effectiveness of recovery efforts.
Implementing regular training programs to upskill staff members and enhance their
understanding of recovery management principles and regulatory compliance will ensure
a well-equipped workforce.

 Bandhan Bank's Non-Performing Assets & recovery management at the Jalgaon

branch emphasizes a customer-centric approach, empathy, transparency, and
compliance with regulatory standards.

 Strengths include the proactive identification of NPAs, personalized solutions, and

fair treatment of borrowers.

 Challenges lie in resource allocation, particularly in manpower and technology.

 Suggestions for improvement include investing in technology upgrades, enhancing

stakeholder engagement, and implementing regular training programs.

 Overall, the study highlights the effectiveness of Bandhan Bank's recovery practices
while identifying areas for enhancement to further strengthen its recovery
framework.

46
 BIBLIOGRAPHY

1. Recovery of Debts Due to Banks and Financial Institutions Act, 1993. (n.d.).
Retrieved from https://www.rbi.org.in/scripts/FAQView.aspx?Id=26

2. Bandhan Bank. (n.d.). Official Website. Retrieved from

https://www.bandhanbank.com/

3. Industry publications and reports on banking practices and recovery management.

4. Academic journals and articles on banking ethics, recovery management, and

customer-centric approaches in the banking sector.

5. Interviews and insights from Bandhan Bank officials and recovery management
experts.

6. Government regulations, circulars, and guidelines issued by regulatory authorities

such as the Reserve Bank of India (RBI) on recovery management practices in
banks.

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 -Annextures-

Profit & Loss Account

For the Year Ended 31st march 2023

48