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UNION BANK OF

INDIA

GOOD PEOPLE TO BANK

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A Project Report

On

Non Performing Assets

For

UNION BANK OF INDIA

By

Ms. Varsha Prabhakar Wankhede

Under the guidance of

Prof. Pallavi Ingle Madam

Submitted to

University of PuneIn partial fulfillment of the requirement for the award of the degree of

Master of Business Administration (MBA) 2009-2011

Through

Trinity College of Engineering &Research

Pisoli, Pune-48.

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Chapter.

No

PARTICULARS Page. No

1. EXECUTIVE SUMMARY 6

2. LITERATURE OF STUDY 8

3. COMPANY PROFILE 10

4. SCOPE AND OBJECIVE 17

5. RESEARCH METHODOLOGY 19

6. DATA ANALYSIS & INTERPRETATION 21

7. FINDINGS 23

8. RECOMMANDATION 29

9.

CONCLUSIONS

34

10. BIBLIOGRAPHY 37

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CHAPTER NO. 1

EXECUTIVE SUMMARY

With the growing competition in the market and globalization coming into role it has

become essential for any Bank/organization to keep in touch with the recent technology.

My subject of project mainly targets the NPAs in bank. Thus, for a bank to survive in a

market it is very essential to stick to rules and a regulation of RBI, as it is the governing

body of every nationalized bank.

In 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,

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which ceases to generate income to the bank. It is basically a loan for which the interest

or installment or both remains unpaid for the period of 90 days. Thus to keep track of

increasing amount of NPAs, banks have set up recovery Departments. Recovery is most

important department of Banks. The causes of NPAs are varied. The factors responsible for

formation of NPAs could be internal or external. Internal factors could be due to fault of the

bank or the borrower. NPA due to fault of the bank occurs due to the following reasons: Poor

credit appraisal, Poor Credit Monitoring, Lack of organizational learning in the bank,

Improper repayment schedule, Timing of loan, Inadequacy of trained and knowledgeable

staff, Adverse selection of borrowers, Targeted lending, Contagious default etc. NPA due to

fault of the borrower could be because of willful default, Diversion of funds, Incorrect

financial information and Inefficient management. The external factors include Natural

calamities, Change in government policies, change in technology, Liberalization, Loan

waiver schemes of the government and Defaulter friendly legal system.

In many financial services, recovery forms the heart of its operation without which the

organization cant survive. If there is no satisfactory recovery the organization will

become sick.

With todays world getting close and considering a world a global village

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CHAPTER NO. 2

NPAs have become a threat to the entire economy as the success of the other sectors

Depends upon the success of the financial sector. Hence study of NPAs is a very

Important exercise. Banks not only need to recover NPAs but also prevent formation of

fresh NPAs. NPAs have an impact not only on the banks but also on the entire economy.

The effect of NPAs is: Impact on Profitability, Excessive capital requirement, high cost

of funds to genuine borrowers, Excessive focus on credit risk management, Slow

Recycling of funds, Asset liability mismatch, Attitude of Banks towards credit delivery

Reputation risk and impact on the staff morale.

RBI has laid down certain Prudential Norms with respect to Asset Classification,

Income

Recognition and Provisioning relating to advances, which the banks need to follow.

These guidelines help the banks to identify their NPA properly. A proper provision is

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Also made for these NPA so that whenever a NPA is written off the provision can be

Written off and not the capital. It is very necessary to manage NPA properly. There are

Various techniques to identify whether an account is turning bad. Internal checks and

Controls like appointing a relationship manager for monitoring accounts, credit rating

System, special mention category and early warning signals can help in identifying

Whether an account is turning bad.

Other techniques that could be used are Loan review mechanism, Effective MIS,

Financial statements of the borrower etc. Pre sanction appraisals and post sanction

Follow up also needs to be done. Thus the bank is saved from the default risk of the

Borrower.

RBI has introduced certain measures like the NI Act, Civil Suit, SARFAESI

Act, 2002 to facilitate recovery.

.

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CHAPTER NO. 3

Union Bank of India was inaugurated by the Father of the Nation, Mahatma

Gandhi,onNovember 11, 1919. Started as a limited company in Mumbai, it was one of

the few Financial Commercial banks in India. Until 1947, UBI had only 4 branches - 3

In Mumbai and 1 in Saurashtra, all concentrated in key trade canters. Catering to all

the sectors of the society, be it agriculture, industry, trade and commerce, services or

Infrastructure, the bank has also played a major role in rendering services to the financial

Needs of every section. Apart from this, the bank also extended financial support to

Educational, housing and trade sector.

Union Bank of India undertook the task of establishment of village knowledge centers

and self-employment training centers. It was in 1975, that the Union Bank of India was

Nationalized. It was, then, that it merged with the Belgaum Bank, a private sector bank.Another merger was on cards in 1985, this time with the Miraj State Bank. Union Bank is

a Public Sector Unit with 55.43% Share Capital held by the Government of India. The

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Bank came out with its Initial Public Offer (IPO) in August 20, 2002 and Follow on

Public Offer in February 2006. Presently 44.57 % of Share Capital is presently held by

Institutions, individuals and others.

UNION BANK OF INDIA ESTABLISHED ON 11.11.1919 and completed 90 years

in banking business in India.

Union Bank Nationalised on 19th

July, 1969. [ one among the total 14 nationalized

banks on that day. This is the first banks nationalization. Again in 1980, 6 more banks

nationalized, making total 20. Out them New Bank of India was merged with Punjab

National Bank. Now total Nationalized banks stood at 19.and including IDBI Bank thereare 20, State Bank of India and its associated banks are separate.

The Present Chairman of Union Bank is Shri M.V. NAIR .,

Two Executive Directors are there : Shri S. Raman and Shri Subhash Chandra Kalia.

There are 26 General Managers.

Head office is situated in MUMBAI [ Nariman point ] . Union Bank structure is:

Central Office, under the Central Office, 9 Zonal Offices, 55 Regional Office, 2752

Branches, more than 2200 ATMs, are working.Total staff of Union Bank is above 29,000. So far since its inception the following six

Banks merged with Union Bank.

1. Perambavoor Bank ltd.,2. Catholic Union Bank ltd.,3. Nadar Mercantile Bank ltd.,4. Belgaum Bank Ltd.,5. Miraj State Bank ltd.,6. Sikkim Bank ltd.,

THE STRONG STRENGTHS OF UNION BANK OF INDIA.

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Union Bank never incurred losses since its inception. Ist largest Nationalized Bank which completed 100% CBS (Core Banking

Solutions) i.e. On line banking from any of its branches.

Never involved in Financial Scams. Best IT User Award obtained from NASSCOM. Branch Net work is evenly distributed in all over India and best Customer

friendly bank.

So far two Chairmans of Union Bank appointed as RBI Dy. Governors, named1. Sri SP Talwar and 2. Sri V. Leeladhar.

THREE times obtained GOLDEN PEACOCK award for its best training avenuesand systems.

Union Bank stands at 4th place now among Nationalized banks. Several Union Bank General Managers are working as Executive Directors in so

many Natinalised banks. For example Sri TAJ is working as ED in Andhra Bankat Hyderabad.

Ist Bank to introduce Mobile Banking.

IMPORTANT OTHER MATTERS:

1. Our Bank was AWARDED WITH GOLD TROPHY and a Certificate inELITE CLASS FOR EXCELLENCE IN MARKETING & BRAND

COMMUNICATION by Association of Business Communicators of India

[ABCI] in Mar, 2010.2. Our Bank was AWARDED WITH PRETIGIOUS SKOCH CHALLENGER

AWARD, 2009 for EXCELLENCE IN CAPACITY BUILDING THROUGHINNOVATIVE CONCEPT OF VILLAGE KNOWLEDGE CENTRES as part ofFinancial Inclusion.

3. 5 Representative Offices including one opened in London [UK] in April, 2010.Others are Shanghai, Beijing, in PRC, Abudhabi in UAE, and Sydney inAustralia.

4. We have one Branch in HONG KONG.5. 35% of our Bank transactions are conducted by Customers through alternate

delivery channels.

6. Ist bank to introduce Mobile Banking.7. There are more than 200 VKCs are working.

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Future plan of union bank of India

IN 2007 Union Bank starts its ambitious project ofPROJECT NAVNIRMAN with a

Vision to become one among the top three nationalized banks by 2012 with big in size,

Having Global presence, and finally shaping the bank as a Financial Super Market

vision of the bank

To become the bank of first choice in chosen areas by building beneficial and lasting

Relationships with customers through a process of continuous improvement

mission

To be the largest nationalized in India with global presence. To be a financial supermarket with leadership in identified spaces. To be bank where customer come first. To be a top creator of shareholder wealth through focus on profitable growth. To be a young organization leveraging its experienced workforce. To be the most trusted brand, admired by all stakeholders. To be a socially responsible organization known for the best corporate

Governance.

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Structure of Union Bank of India

Assistantgeneralmanagerit is the higher most authority of the bank. Branch manager

use to work under AGM. This authority controls all branch managers under his area.

Branch manager- BM use to control and regulate the branch. He is having authority to

interfere in the work of any staff member.

Accountant- in absence of BM accountant should lead the branch. Normally he used to

check all entries of transaction. Clerk must ask for his permetion to do the transaction

over certain amount.

Field officerthis is third one higher authority of the branch. He used to take decision

about loan proposals.

Cash officer- he uses to handle cash directly. In the absence of all above mention higher

authority he uses to command over branch.

Clerk- all thesepeopleuseto handle the customer directly. They use to do receipt and

payment and all these things directly.

Assistant General Manager

Branch Manager

Field Officer Accountant Cash Officer

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PRODUCTS AND SERVICES PROVIDED BY THE BANK

Deposits Accounts Loans Cards Insurance Cash Management Service Mutual Funds Demat ATMs E Banking Or Online Banking Remittance Service Bill Payment Service Tax Payment Service Atm Banking Tele Banking Online Demat Trading Cash Management Services Mutual Funds Railway Tickets Booking 8% Tax Saving Bonds Public Provident Fund (PPF) Direct Tax Collection Central Excise and Service Tax Collection Services Special Savings Schemes for Senior Citizens

o E-banking [internet banking.]o Credit Cardso Debit Cards [ATM cards]o Mobile banking.o SMSBanking.

[At present more than 35% operations are conducted by our Customers

through Alternate Delivery Channels.]

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CHAPTER NO. 4

OBJECTIVES OF THE STUDY

To study Non Performing Assets of Union Bank of India. To study ratio analysis of SSI to make appraisal. To make right appraisal of customer for giving loan. To recognize the Income, assets classification and the provisioning norms related

to NPAs.

To study the recovery process of bank. Identify the Causes of Non Performing Assets and their Impact on

Banks

Study the Norms with respect to Borrower verification, Loan sanction,

Asset Classification and Provisioning.

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Find the techniques for NPA identification and Management of NPARecovery Methods of Non-performing Assets Direct, Indirect

Methods

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CHAPTER NO. 5

Research Methodology is a way to systematically solve the problems. It

may be understood to study how research is done scientifically. In this, we

study various steps that are generally adopted by the researcher in studying

research problems along with the logic behind them, to understand why we

are using particular method or technique so that the research results are

capable of being evaluated.

Data collection The data collected for the project was in the form of

written as well as verbal information regarding the loan indication.

1) Primary data- The information about the bank is gathered from the

files of the loan taker or customer of the bank.

2) Information from annual report of the bank

3) I have also As to keep updated from latest norms of RBI for NPA referred to the

latest RBI manual having guidelines for calculation of NPA.

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4) Timely Discussion with branch manager.

5) Branchwebsite

i.e.www24framesdigital.com/ubiwebcast/020710.com

2) Secondary data- The secondary data was collected from

Summary reports about classification of loan defaulters, movementof NPAs etc.

Circulars and notifications of RBI concerning NPAs and creditmanagement.

MIS reports of the defaulters and NPAs.ANALYSIS OF DATA:-

The data collected was analyzed to find out the causes of NPAs, impact ofNPAs and their prevention techniques. The analysis of data requires a number of

closely related operations such as establishment of categories, the application of

these categories to raw data through coding, tabulation and then drawingstatistical inferences.

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CHAPTER NO. 6

ANALYSIS AND INTERPRETATION OF DATA

Every bank in order to recover the dues has a recovery process set for them. The

usual legal recovery process adopted by the bank in the following nature.

Legal Process of Recovery

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Legal Process of Recovery

Notice to Guarantors

Authority Letter to lawyer

Demanding amount through notice

Personal Visit to the Borrower

Not receiving amountReceiving amount from

client

File case in court

Recovery expenses Completion of verification

Stopped recovery process

after receiving all payment

Debit note for expenses

Lawyers argue before

issuing

Argument in court if court

satisfied, issue the summons

Police station serving thesummons to defaulter

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CHAPTER NO. 7

Findings

CAUSES OF NON PERFORMING ASSETS

DUE TO FAULT OF THE BORROWER-

1. Willful default: There have been a number of borrowers who have

strategically defaulted on their debt service obligations realizing that the

legal recourse available to creditors is slow in achieving results.

2. Diversion of funds: Sometimes the borrower may take a loan for a

particular purpose and use the loan amount for some other purpose. The

borrower may engage in activities that may be personally beneficial to him

but may increase the probability of default and thus harm the lender. The

borrower may invest in unprofitable projects, in projects with higher risk,

in which the borrower profits if the project succeeds but the lender bears

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most of the loss if the project fails. In many cases the borrower instead of

using the loan amount for the required purpose, uses it mostly for

expansion, diversification, and modernization of the existing plant. Due to

this the project for which the loan is taken does not materialize and the loan

turns bad.

3. Incorrect financial information:

In many cases borrowers submit incorrect salary slips, financial statements,

bank statements, security etc to get their loans sanctioned. Even during

field investigations visits the borrower is able to show a good picture. The

bank is unaware of the actual facts and grants the loan on the basis of

documents. These loans ultimately become bad.

4. Inefficient management:

Many borrowers do not have the sources to do repay loan effectively. In

spite of the other factors being present like adequate finance/property the

borrower becomes defaulter due to inefficient management of funds.

EXTERNAL CAUSES:

The external factors are those which are attributable to reason, which are

beyond the control of the banks and thus, the banks cannot be held

responsible for the defaults caused by these factors. Some external causes

are:

1. Natural calamities like floods and accidents:

Due to natural calamities the house/building gets destroyed and the

borrowers are left with no home, to repay the loans for. The bank cannot

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enforce the security on the loan as that also gets destroyed. Thus the

advance given for the projects becomes bad.

2. Change in Government policies: Government policies are responsible

to some extent for adding to the volume of non-performing assets of banks.

Loans are taken keeping in mind current policies. But when the policies are

changed the prospects of certain projects gets affected, as the new policy

may be different from the earlier one. At this stage the project cannot be

reversed, thus leading to its failure. Thus the funding for that project

becomes NPA.

3. Change in interest rates:

Sometimes loans are taken keeping in mind that the interest rates will be

same over the period of repayment. But with factors like inflation, change

in repo rates by RBI. Due to these factors the loan repayment burden on the

borrower increases leading to defaulters/NPAs.

4. Defaulter friendly legal system:

The legal system in India does not permit early recovery of dues. It is

sympathetic towards borrowers and works against banks interest. These

legal procedures are a drain on resources and are highly time consuming as

the matters get invariably delayed with law courts granting adjournments

one after another for any small reason. More money is spent than what is

hoped to be recovered by pursuing these cases in the courts of law. There

may be a tendency to write off a small amount of advances in the face of

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prohibitive legal and administrative cost and inordinate delay in final

settlement.

3. IMPACT OF NON PERFORMING ASSETS

At the macro level, NPAs have affected the supply line of Credit of the

potential lenders thereby having a deleterious effect on capital formulation and

arresting the economic activity in the country.

At the micro level, unsustainable levels of NPAs have eroded current profits of

banks. They have led to reduction in interest income and increase in provisions

and have restricted recycling of funds.

NPAs not only affect the profitability of the bank but also have other serious

impacts.

1. Impact on Profitability:

Performance in terms of profitability is a benchmark for any business

enterprise including the banking industry. However, increasing NPAs have a

direct impact on banks profitability as legally banks are not allowed to book

income on such accounts and at the same time banks are forced to make

provision on such assets as per the Reserve Bank of India (RBI) guidelines.

The enormous provisioning of NPA together with the holding cost of such

non-productive assets over the years has acted as a severe drain on the

profitability of the PSBs. The minimum cost of

Holding NPAs is around 7% p.a. (reckoning average cost of funds at 6% plus

1% service charge).

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Also due to the advance becoming bad, interest is not received on it and hence

the income reduces to that extent. They are not merely non-remunerative but

also cost absorbing and profit eroding.

2. Excessive Capital requirement:

Writing off of loans requires capital and the banks have to maintain capital

adequacy even on NPAs. The capital adequacy ratio is directly related to the

quality of loan assets of the Bank. A bank can make losses and requires capital

to write it off. Since these losses are written off against capital, fresh capital is

required whenever any advance is written off. Thus any increase in defaults

will require increase in capital whenever they are written off.

Every bank has to maintain some amount of capital in the books on the basis

of its risk-weighted average of assets. If an advance turns bad, it continues to

be a part of the assets thus requiring the bank to maintain that much amount of

capital in the books. No interest is earned on the advance but still the bank has

to maintain capital on assets, which are not yielding any income.

3. Excessive focus on credit risk management:

The most important business implication of NPAs is that it leads to credit risk

management assuming priority over the other aspects of banks functioning.

The banks whole machinery would thus be pre-occupied with recovery

procedures rather than concentrating on expanding business.

4. Slow recycling of funds:

The advances that are repaid and the interest on them that a bank gets are

recycled to give further advances. Now if an account turns bad funds are not

received thus slowing down the process. Supply of funds gets reduced which

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affects credit expansion. Thus there is slow recycling if funds and the bank

cannot lend money for productive activities to improve earnings.

5. Asset Liability mis-match:

Increasing NPAs result in asset liability mis-match. If non-interest earning

assets i.e. NPAs are funded through short term liabilities there will be a mis-

match. To avoid this mis-match NPAs

Should be funded by long-term liabilities. But it becomes difficult to mobilize

large amount of long-term funds for these assets.

6. Reputation risk:

The credit rating of a bank may get affected due to disclosures on quantum

and movement of NPAs, provisions etc. The risk perception towards the bank

may increase and the bank may not be able to mobilize enough deposits even

at a higher rate of interest. This would affect the competitiveness of the bank.

7. Impact on staff morale:

High level of NPAs affects the staff morale. There may be a conflict among

the different departments as to who is responsible for the high level of NPA. It

may also lead to low productivity because the staff gets involved in the

recovery process and they do not get time to do their normal work.

8. Impact on the real sector:

The growth of the real sector ultimately depends upon the success of the financial sector.

Large level of NPAs may affect the functioning of the banks and hence the main function of

The bank of accepting deposits and lending money may get affected. Inadequacy of funds

will

Adversely affect the success of the real sector.

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CHAPTER NO. 8

MANAGEMENT OF NON PERFORMING ASSETS

The quality and performance of advances have a direct bearing on the

profitability and viability of banks. Despite an efficient credit appraisal and

disbursement mechanism, problems can still arise due to various factors. The

essential component of a sound NPA management system is quick

identification of non-performing advances, their containment at minimum

levels and ensuring that their effect on the financials is minimum.

The most effective way to recover NPA is to first stop an account from turning

bad. If it can be identified that an account is turning bad then many corrective

steps can be taken to prevent it from turning bad. Hence a bank must take all

the steps necessary to ensure that an account doesnt turn bad.

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TECHNIQUES FOR NPA IDENTIFICATION

1. Internal checks and controls:

High levels of NPAs dampen the performance of banks. Thus the

identification of potential problem accounts and their close monitoring

assumes great importance. Most banks have Early Warning Systems (EWS)

for identification of potential NPAs. However the actual processes followed

differ from bank to bank.

The major components of a EWS followed by banks in India as brought out by

a study conducted by RBI are:

Designating a Relationship manager/ Credit officer for monitoring

accounts:

The official is expected to have complete knowledge of the borrower, his

business, his future plans etc. The manager has to keep in constant touch

with the borrower and report all developments impacting the account. He

also has to conduct scrutiny and activity inspections.

Credit rating system:

Credit Rating system is an indicator of individual credit exposure and is used

to identify measure and monitor the credit risk of individual proposals. Most

banks in India have put in place the system of internal credit rating. While

most of them have developed their own models, a few banks have adopted

credit rating models designed by rating agencies. These models take into

account various types of risks viz. financial, industry and management, etc

associated with a borrower unit. The exercise is generally done at the time of

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sanction of new borrower account and at the time of review/ renewal of

existing credit facilities.

Know your client profile (KYC):

Most banks in India have a system of preparing know your client (KYC)

profile/credit report. As a part of KYC system, visits are made on clients and

their places of business/units. The frequency of such visits depends on the

nature and needs of relationship.

Watch-List/ Special mention category:

The grading of the banks risk assets is an important internal control tool.

The management has to identify and monitor potential risks of a loan asset.

The purpose of identification of potential NPAs is to ensure that

appropriate preventive/corrective steps could be initiated

By the bank to protect against the loan asset becoming non-performing.

Most of the banks have a system to put certain borrower accounts under the

watch list or special mention category if performing advances operating

under adverse business or economic conditions are exhibiting certain

distress signals. The categorization of such accounts provides early

warning signals to anticipate credit deterioration and take necessary

preventive steps to avoid their slippage into non-performing assets.

Early Warning Signals:

A host of early warning signals are used by different banks for identification

of potential NPAs. Most banks in India have laid down a series of operational,

financial, transactional indicators that could serve to identify emerging

problems in credit exposures at an early stage.

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Early warning signals can be classified into five broad categories:

a) Financial b) Banking and c) External factors.

Financial Warning signals:

Default in repayment obligation

Deterioration in regularity of repayment.

Banking related signals:

Declining bank balances/operations in the account

Frequent delays in submitting financial data regarding the construction,

Frequent requests for time for paying the EMIs.

Signals relating to external factors:

Economic recession

Changes in government/regulatory policies

2. Loan review Mechanism:

Loan review mechanism (LRM) is a tool to bring about qualitative

improvement in credit administration. It is used for monitoring large borrower

accounts with a view to identifying potential NPAs. LRM involves an

independent assessment of the quality of an advance, over a cut-off limit, soon

after sanction and periodically thereafter. It helps track weaknesses developing

in the account for initiating corrective measures in time. It provides the Top

Management with information on quality of credit administration, including

credit sanction process, risk evaluation and post-sanction follow-up. LRM is

expected to significantly contribute towards preventing and limiting

emergence of NPAs.

3. Effective MIS:

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It is the most important tool for planning and policy decision-making. It

facilitates compilation of data, its necessary processing and use for

implementing the plans and policies for attainment of corporate objectives.

The importance of MIS has increased manifold, since the introduction of

Prudential accounting norms on Income Recognition, Asset Classification and

Provisioning. An effective MIS can help the bank if it keeps a record of the list

of defaulters and updates it regularly. The data on NPA not only attracts the

attention of the management but also the Government, RBI and the general

public. The overall performance of the bank is judged based on the above

information. Thus having an effective MIS is very important for the bank.

5. Usage of financial statements in assessing the risk of default for lenders:

For banks and financial institutions, both the balance sheet and income

statement have a key role to play by providing valuable information on a

borrowers viability

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CHAPTER NO. 9

NPAs is a major threat to the UBI and is a major hurdle in thegrowth of the UBI .

More attention needs to be given to the study of NPAs so as toprevent them.

Stricter norms and their proper implementation are required forsanctioning of loans.

Equal importance to pre-sanction as well as post-sanction follow-upof loans is needed.

Use of MIS is an important way to control and prevent NPAs. Sharing of common database of defaulters and NPAs between

different banks is required.

Laws relating defaulters and NPAs needs to be updated and stricter. Proper management and communication are required within the

branch of a bank and also among different branches of the bank.

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CHAPTER NO. 10

Interest has been paid in this account up to July 2009. Interest remains unpaid from

august2009 Onwards. However, the party has not repaid principal amount of Rs.

500000/- for Oct, Nov,& Dec2009

In this case account will become NPA as on31.12.2009becauseinterest debited

to the account Up to end of Sept 2009(previousquarterdebitedduringAug2009andSept 2009)Has not been paid in full before the

end of the subsequent quarter i.e. Dec 2009 In the present case even though interest

is overdue more than 90 days as on 31.11.2009. This account wills not NPA as on

30.11.2009

Scenario2

Interest charged in this account for the month of march 2010 has been paid in April

2010 however installment due in march 2010 has not paid up to June 2010 in in

other words installment of march 10 april10 and may 10 are not paid before the

end of June 10 in this case the account will become NPA

Scenario3

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Interest charged for the month of march 2010 has not been paid upto

30.6.2010 Installment of principal due in march 10 april 10 may have

not been paid upto 30.06.2010

On account of the following two reason

Interest charged during the quarter has not been paid fully within 90days from end of the quarters

Installment of principal remaining overdue for a period of more than90 days out of order Position

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CHAPTER NO. 11

Books:

NPAs in Banks Concept, Practice and Management By: N.S. Toor

Law relating to Securitization and Reconstruction of Financial Assets and Enforcement

of Security Interest -By Umarji

Reports and Papers:

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Report on the working group to review the functioning of Debt Recovery Tribunals RBI

Circular of the bank which are provided by the RBI to the union bank of India

Websites visited:

www.ubi.org.in

www.24framesdigital.com/ubiwebcast/020710.com

http://www.indianbanksassociation.org

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