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NPAs of co operative bank

Presented by Hardeep sharma Roll no. 120425717 MBA- 3rdsemester

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Introduction: NPAs are loans made by a bank or a finance company

on which repayments or interest payments are not

being made on time. This study focuses on theproblem of NPA, its reasons, effects.

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PROFILE OF THE ORGANISATION

The Punjab State Cooperative Bank was establishedon 31st August, 1949 at Shimla vide registration No.720 has a principle financing institution of the

cooperative movement in Punjab.

In 1951 its Head Office was shifted to Jalandhar fromwhere it moved in 1963 to its present building atChandigarh. In the cooperative Banking structure, theposition of the Punjab State Cooperative Bank isextremely important as the whole credit systemrevolves around it.

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Organizational Structure

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Types of co-operative banks

Co-operativebanks

Rural co-op.banks

Short termco-op. banks

Long termco-op. banks

Urban co-op.banks

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Rural co-

operativebanks

Short term co-op. banks

State co-op. banks

Central co-op. banks

Primaryagricultur

e creditsocieties

Long term co-op. banks

State co-op.agriculture and

ruraldevelopment

banks

Primary co-op.

agricultureand rural

developmentbanks

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OBJECTIVE S OF THE BANK

To protect the rural section from greedy money lenders

To provide easy credit facilities to the farmers

To promote and develop cooperative societies in the state

To provide training and education facilities to farmers Overall development of rural areas

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Review of literature Books:

MY Khan, Financial Services

LM Bhole, Indian Financial System

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Objectives of study To understand what is NPA.

To understand what are the reasons for the emergence ofthe NPAs.

To understand the dimensions of NPA.

To study the position of NPA in co-op. bank. To study the tools used for management of NPAs.

To evaluate the ratio of the bank with concerned to theNPAs.

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Research methodology Research design : Exploratory research design

Source of data:

Secondary data : annual reports of the bank Internet ,financial books and agricultural book.

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Limitations of study Error is possible.

Unable to get current data.

l f f

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Classifications of

Assets

Assets

Performingasset or

standard asset

Non-performing

assets

Sub-standardassets

Doubtfulassets

Loss assets

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Non-performing assetsNPA is a loan made by a bank or a finance companyon which repayments or interest payments are notbeing made on time.

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Types of NPA Gross NPA

Net NPA

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Reasons of NPA Unwillingness of customers

Ineffective recovery system

Natural calamities

Inflation Problems in agriculture sector

Ineffective government policies

Inappropriate technology

Poor credit appraisal system Inefficient staff

Willful default is not a criminal offence.

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Effects of NPA Reduces profitability.

Reduces the image of the bank.

Blockage of funds. Reduces chances of growth.

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Management of NPAs Early recognition of the problem.

Identifying borrowers with genuine intent.

Settlement with customers. Lok adalats.

D t l i d i t t ti

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Data analysis and interpretations

010

20

30

40

50

60

70

80

90100

standardassets

sub-standardassets

Doubtfulassets

loss assets

98.69

0.6

0.62 0.08

Year Wise NPA at Cooperative Bank for 2009-10

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0

10

20

30

40

50

60

70

80

90

100

standard assets sub-standardassets

Doubtful assets loss assets

97.86

1.28 0.7 0.15

Year Wise NPA at Cooperative Bank for 2010-11

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0

2040

60

80

100

stanadardassets

sub-standardassets

Doubtful assets loss assets

97.36

1.14 1.043 0.44

Year Wise NPA at Cooperative Bank for 2011-12

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2009-102010-11

2011-12

1.31

2.14

2.64

Gross NPA Ratio (%)

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2009-102010-11

2011-12

0.6

1.041.21

Net NPA Ratio (%)

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Year wise-Inflation RateYear

2004

2005

2006 2007

2008

2009

2010

2011 2012

2013

Inflation rate (%)

3.77

4.25

5.79 6.39

8.32

10.83

12.11

8.87 9.30

11.04

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Findings Gross NPAs are increasing every year. This is not good

for bank.

Net NPA is increasing every year.

Standard assets are reducing every year. Substandard asset ratio firstly increases then reduces.

Doubtful asset ratio is increasing every year.

Loss assets are increasing every year. The position of the bank is not good with respect to its

financial assets.

Increase in inflation is a main reason behind NPAs.

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Suggestions Financial capacity of the borrower should be

evaluated.

Settlement procedure should be more strict and faster.

Innovative technology should be adopted.

Willful defaults should be made a criminal offence.

Proper training should be given to the staff.

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Conclusion Financial performance of the banks is not good due to

the problem of NPAs. So this problem should betackled as soon as possible. Otherwise our socio

economic objectives cannot be achieved.

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THANK YOU