EXECUTIVE SUMMARY The most important problem that the Indian banks are facing is the problem of their NPAs. It is only since a couple of years that this particular aspect has been given so much importance.
The banks have to overcome these difficulties properly in order to effectively counter the competition faced by the foreign banks. With the framing of laws as per international standards and setting up of Debt recovery tribunal we can say that steps have been taken in this direction. Banks in India have traditionally been saddled with very high Non-Performing Assets.Banks burdened with huge NPA’s faced uphill tasks in recovering then due to archaic laws and procedures. Realizing the gravity of the situation the government was quick to implement the recommendations of the Narsimham Committee leading to the enactment of the SARFAESI ACT 2002.
(Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act). This Act gave the banks the much needed teeth to curb the menace of NPA’s. The non performing assets (NPAs) of banks have at last begun shrinking.As reported from surveys, it is understood that there has been substantial improvements in non performing assets and this has been because of several measures such as formation of asset reconstruction companies, debt restructuring norms, securitization, provisioning norms and prudential norms for income recognition.
We also give our suggestions as to how NPA retrieval can be made easy and in what way the NPA scenario is headed. The problem is no doubt about recovery management where the objective is to find out about the reasons behind NPAs and to create networks for recovery.Feature Article - Fsibl ReportBanks of Ahmedabad, Patan & Mehsana have been considered where 20 executive have been approached with a structured question to elicit information. The crucial factor that decides the performance of banks now a days is the spotting of non-performing assets (NPA).
NPAs are those loans given by a bank or financial institution where the borrower defaults or delays interest or principal payments banks are now required to recognize such loans faster and then classify them as problem assets. Highlights ? The aggregate net non-performing assets (NPA) of 25 banks increased to Rs 17,992. 2 crore in second quarter of 2008-09 from Rs 15,462. 84 crore in the same period of FY’08. ? The average capital adequacy ratio (CAR) of 25 banks slipped to 12.
68 per cent in Q2-FY ’09 from 13. 41 per cent in the previous year. ? Major PSBs recorded a significant decrease in net NPAs. ? 16 banks witnessed a fall in their CAR from the previous fiscal, but they still managed to remain above the prescribed limit of nine per cent posed by the Basel II accord. ? Axis bank registered the maximum decline in CAR from 17.
59 per cent in Q2 FY’08 to 12. 2 per cent in Q2 FY’09. PREFACE As a Student of M. B. A. e have prepared the following “Management Research Project-II”, as a part of our curriculum.
This report presents a Non Performing Assets along with all its surrounding issues by doing its micro analysis in this subject. Based on interest, our group decided to select NPA IN VARIOUS BANKS & ITS RECOVERY MANAGEMENT as the topic for project. In this project we have considered sector wise NPA, use various tools and techniques, analysis and effect of NPA in banking sector . Here, we have tried to cover each and every aspect related to this topic.
From this research project, we got an opportunity to gain practical knowledge in management field.Although we can’t say that our project is without any error but we had tried our best for the same. We referred several leaflets, research papers, websites and books for the preparation of the project. The initial objectives of this report are to know the overall NPA & its Recovery management, have idea about NPA method, tools, its effect, factor affecting in NPA and recovery management etc. It is indeed a golden opportunity for us to present this report and indeed a matter of esteem honor itself.
Date: 28th April, 2009 Place: Visnagar ACKNOWLEDGEMENT Action will delineate and define you ……it is always the result of an intelligent effect.There must be a will to produce a superior thing. All we need in this world is hard work and confidence and the success is sure. Success is not a one-man phenomenon but it is the result of working together. We, Khushbu Joshi, Brijal Barot, Purva Harne, Tejas Pandya and Trupti Prajapati the students of M.
B. A. IV Semester of North Gujarat University, Patan express our heartfelt gratitude to institute for providing us with much of their precious time, resources & continuous co-operation throughout our project report on “Management Research Project – II ”.First and for most, we would like to express my deepest gratitude towards Dr.
Jayaashish Sethi , HOD,N. S. V. K. M. S, M.
B. A. college Visnagar, for his consent and support. We are profoundly grateful to all faculty members who has shared their precious time to help us and for giving us valuable guidance to develop this report.
It is a matter of great pleasure to have this opportunity to express our whole hearted sense of gratitude indebted to our sirs & professors from NSVKMS M. B. A. College for giving us all the necessary help, guidance & thorough motivation in completion of the report.
Their valuable guidance in investigation & unstated help rendered by them in preparation of this project work have helped us a lot to complete our project work within the decided period of time. At last, but not least we heartily offer our gratitude to our “God” without his blessing survival & success of anybody is a big question. We also thank all who have helped us in preparing this report knowingly & unknowingly in a direct or indirect manner. Khushbu Joshi Brijal Barot Purva Harne Tejas Pandya Trupti Prajapati