cooperative bank

NPAs of co operative bank

Presented by Hardeep sharma Roll no. 120425717 MBA- 3rd semester

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 the problem of NPA, its reasons, effects.

PROFILE OF THE ORGANISATION

The Punjab State Cooperative Bank was established on 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 from where it moved in 1963 to its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State Cooperative Bank is extremely important as the whole credit system revolves around it.

Organizational Structure

Types of co-operative banksCo-operative banks

Rural co-op. banks

Short term co-

op. banks

Long term co-

op. banks

Urban co-op. banks

Rural co-operative banks

Short term co-op. banks

State co-op.

banks

Central co-op.

banks

Primary

agricultur

e credit societ

ies

Long term co-op. banks

State co-op.

agriculture and rural

development banks

Primary co-op.

agriculture and rural

development banks

OBJECTIVE S OF THE BANKTo protect the rural section from greedy money lendersTo provide easy credit facilities to the farmersTo promote and develop cooperative societies in the stateTo provide training and education facilities to farmersOverall development of rural areas

Review of literatureBooks:MY Khan, Financial ServicesLM Bhole, Indian Financial System

Objectives of studyTo understand what is NPA.To understand what are the reasons for the

emergence of the 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 the NPAs.

Research methodologyResearch design : Exploratory research

designSource of data: Secondary data : annual reports of the bank

Internet , financial books and agricultural book.

Limitations of studyError is possible.Unable to get current data.

Classifications of Assets

Assets

Performing asset or standard asset

Non-performing assets

Sub-standard assets

Doubtful

assets

Loss assets

Non-performing assets NPA is a loan made by a bank or a finance

company on which repayments or interest payments are not being made on time.

Types of NPAGross NPANet NPA

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.

Effects of NPA Reduces profitability.Reduces the image of the bank.Blockage of funds.Reduces chances of growth.

Management of NPAsEarly recognition of the problem.Identifying borrowers with genuine intent.Settlement with customers.Lok adalats.

Data analysis and interpretations

standard assets

sub-standard assets

Doubtful assets

loss assets0

10

20

30

40

50

60

70

80

90

100

98.69

0.60.62

0.0800000000000001

Year Wise NPA at Cooperative Bank for 2009-10

standard assets

sub-standard assets

Doubtful assets

loss assets0

10

20

30

40

50

60

70

80

90

100

97.86

1.28 0.7 0.15

Year Wise NPA at Cooperative Bank for 2010-11

stanadard assets

sub-standard assets

Doubtful assets

loss assets0

10

20

30

40

50

60

70

80

90

100

97.36

1.14 1.043 0.44

Year Wise NPA at Cooperative Bank for 2011-12

2009-102010-11

2011-12

1.31

2.142.64

Gross NPA Ratio (%)

2009-102010-11

2011-12

0.6

1.041.21

Net NPA Ratio (%)

Year wise-Inflation Rate

Year• 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

FindingsGross 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.

SuggestionsFinancial 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.

ConclusionFinancial performance of the banks is not

good due to the problem of NPAs. So this problem should be tackled as soon as possible. Otherwise our socio economic objectives cannot be achieved.

THANK YOU