npa ppt

PANKAJ MITTAL(5335)MBA 3rd SEM

A NPA is a loan or an advance where;• Interest and/ or installment of principal

remain overdue for a period of more than 90 days in respect of a term loan,

• The account remains “out of order” in respect of an overdraft/ cash credit

• The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted

• The installment or interest remains overdue for two crop seasons in case of short duration crops and for one crop season in case of long duration crops

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There are three major types of NPA: Sub-standardSub-standard : The account holder comes in this category when

they don’t pay three installment continuously after 90 days and up to 1year. for this category bank has made 10% provision of funds from their profit to meet the losses generated from NPA.

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Doubtful NPADoubtful NPA : under doubtful NPA there are three sub categories :

D1 i.e. up to 1 year : 20% provision is made by the banks D2 i.e. up to 2 year: 30% provision is made by the bank D3 i.e. up to 3 year : 100% provision is made by the bank.

Loss Assets Loss Assets : under this 100% provision is made. When account holder comes in this category their account can be written off by the banks.

After this the assets are handed over to recovery agents for sale

•Ineffective recovery tribunal •Willful Defaults•Change on Govt. policies •Poor credit appraisal system •Absence of regular industrial visit

The basic idea behind undertaking the Grand Project on NPA was to: To study the past trends of NPATo analyze financial performance of banks at different level of NPA To Know the Concept of Non Performing Asset To Know the Impact of NPAsTo Know the Reasons for NPAs

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This study will help to know the recent norms of NPA.

This study helps to know how NPA Causing Problems to Banking Sector and what might be the solution to overcome from this problem and also its impact on Profitability of New Profit Banks.

Secondary data is used in this research. In secondary data, the published is collected from the Dera Bassi Co-operative Bank.

Basic tools which I used for project from statistics are

•Bar Charts •Pie charts Bar charts and pie charts are useful tools for every research to show the result in a well clear, ease and simple way. Because I used bar charts and pie charts in project for showing data in a systematic way, so it need not necessary for any observer to read all the theory.

DATA ANALYSIS AND INTERPRETATION STATUS OF NPA ON MARCH 2006 Total Loan Outstanding 24848.77 Standard Assets 23224.90 % of Standard Assets 93.46% Total NPA 1623.87 % of NPA 6.54%

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CLASSIFICATION OF NPA

Sub-Standard Assets 1033.31

Overdue 3 to 4 Years 81.24


Overdue Above 6 Years 129.75

Loss Assets 237.61

Interpretation

This chart shows the position of NPA in Cooperative Bank. In 2006 the contribution of

sub- standard assets in NPA is 64% and the overdue 3-4 year is 5%, 4 to 6 years 9%

and overdue above 6 years is 8%. The loss assets of the bank are 14% of the total

NPA. Standard assets in 2006 are 93.46% of the total assets and NPA is 6.54%. In

2006 NPA has been decreased than 2005 in the Dera Bassi Co-Operative Bank. The

bank should have taken effective steps to reduce the NPA because this reduction was

not sufficient to improve recovery of loan balances.

Total Loan Outstanding 32403.00 Standard Assets 29561.44 % of Standard Assets 91.13% Total NPA 2871.56 % of NPA 8.87%






Loss Assets 394.06

Interpretation

This chart shows that in the year 2007 sub-standard Assets are 49% of the total NPA .The assets with overdue 3 to 4 Years are 18%, 4 to 6 years are 11% and assets with overdue above 6 years are 8% of the total NPA. The % amount of loss assets is same in 2007 which is also 14%. Standard assets are 91.13 % in this year and NPA is 8.87 % in 2007 which is greater than last Three years.

Total Loan Outstanding 23414.89 Standard Assets 21732.34 % of Standard Assets 92.8% Total NPA 1682.55 % of NPA 7.18%





Loss Assets 378.76


Interpretation

This chart shows that in the year 2008 sub-standard Assets are 58% of the total NPA .The assets with overdue 3 to 4 Years are 8%, 4 to 6 years are 5% and assets with overdue above 6 years are 6% of the total NPA. The amount of loss assets has increased in 2008, which is 23%. Standard assets are 92.8 % in this year and NPA is 7.18 % in 2008, which is less than last years.

Total Loan Outstanding 22595.60 Standard Assets 20368.88 % of Standard Assets 90% Total NPA 2226.72 % of NPA 10%





Loss Assets 341.40


Interpretation This chart shows that in the year 2009 sub-standard Assets are 56 % of the total NPA .The assets with overdue 3 to 4 Years are 22 %, 4 to 6 years are 2% and assets with overdue above 6 years are 5 % of the total NPA. The amount of loss assets has decreased in 2009, which is 15 %. Standard assets are 90 % in this year and NPA is 10 % in 2009, which is greater than last years.

Total Loan Outstanding 27145.74 Standard Assets 25238.03 % of Standard Assets 92.97 % Total NPA 1907.71 % of NPA 7.03 %





Overdue Above 6 Years

105.37

Loss Assets 307.57

Interpretation This chart shows that in the year 2010 sub-standard Assets are 56 % of the total NPA .The assets with overdue 3 to 4 Years are 17 %, 4 to 6 years are 6 % and assets with overdue above 6 years are 5 % of the total NPA. The amount of loss assets has increased in 2010, which is 16 %. Standard assets are 92.97 % in this year and NPA is 7.03 % in 2010, which is less than last years. Thus 7.03% has been reduced in the profit of RCCB In 2009.

In march 2006 standard assets was 93.46% of total loan outstanding and NPA was 6.54% of total loan outstanding In march 2007 standard assets was 91.13% of total loan outstanding and NPA was 8.87% of total loan outstandingIn march 2008 standard assets was 92.80% of total loan outstanding and NPA was 7.18% of total loan outstandingIn march 2009 standard assets was 90% of total loan outstanding and NPA was 10% of total loan outstandingIn march 2010 standard assets was 92.97% of total loan outstanding and NPA was 7.03% of total loan outstandingIn march 2010 NPA has decreased from 10% to 7.03% as compare to march 2009.Dealing with NPAs bank has adopted a policy to remove its own or sell the assets AMCs to clean up its balance sheet.

Credit Appraisal System

Debt Recovery Tribunals

Don’t Eliminate Manage

Effects of Capital Norm Tightening

Legal Issues

Documents

npa ppt