ayesha patnaik's sip ppt

8/8/2019 Ayesha Patnaik's Sip Ppt

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A STUDY ON NPA MANAGEMENTPROCESS IN SBI WITH FOCUS ON

REHABILITATION & RESTRUCTURING

OF SMEs

Ayesha Patnaik



An overview of the presentation

Objectives, methodology and limitations

Conceptual Study

NPA management- the SBI way

Restructuring and Rehabilitation of SMEs

Case Study

Data Analysis Findings, Sugestions and Conclusion



Objectives

To learn the practical aspectof NPA management

To gain familiarity withrestructuring and rehabilitation process

To assess SBI BhubaneswarCircle¶s performance withrelation to restructuring



Methodology

Collecting information from NPA manual of thebank

Talks with SBI officers

Data Collection

Primary Data

Secondary Data

Data Analysis

Simple statistical tools like ratios and percentages



LIMITATIONS

Time Constraint

Only a single case study

Financial statements belonging to pre-rehabilitation phase of the unit studied notavailable

Unavailability of appointment with the promotersof the unit discussed in the case



ASSET

QUALITY- an

introduction



STANDARD

SPECIAL MENTION

ACCOUNT

NPA



NPA-Defined

As per IRAC norms issued by RBI, NPA is aloan where

installment of principal/interest or

both remains unpaid for 90 days

the account remains out-of ±order incase of an cash credit account

the installment of principal remainsoverdue for 2 or more crop seasons incase of short duration crops and 1 cropseason in case of long duration crops



NPA-classes

Sub Standard

Doubtful

D1

D2

D3

Loss



Resolution Strategies

Restructuring / Rehabilitation

Compromise Settlement Schemes

Legal ProceedingsFiling case in civil courts

Debt Recovery Tribunal

Lok AdalatsRecovery through SARFAESI act



Contd.

Sale of NPA to other banks

Sale of NPA to ARC/ SC under Securitization andReconstruction of Financial Assets and

Enforcement of Security Interest Act 2002

(SARFAESI)

Write offs



NPA MANAGEMENT

The

Way



NPA Budget

MONITORING

REPORTING

SPECIAL MENTION ACCOUNT

STRESSED ASSETS REVIEW

SPECIAL BODIES FOR NPA MANAGEMENT



NPA BUDGET

Prepared annually by Corporate centre

Sets targets for NPA reduction

It is prepared for individual circle

Performance is monitored and reviewed on a monthly basisin NPA review meetings

Responsibility is fixed on respective branch manager



MONITORING

AT BRANCH/FIELD LEVEL-branchmanager/field officer

Monthly checklist and committees

RASMECC,SMECCC and RACPC

CIS & CBS



REPORTING SYSTEM

IRREGUL A RITY REPORT

STRESSED A SSETS REVIEW REPORT

ST AFF ACCOUNT ABILITY REPORT



SPECIAL MENTION

ACCOUNT

SMA ISMA

II SUB

STANDARD

DOUBTFUL

I2

3

LOSS



SPECIAL MENTION ACCOUNTS

SMA lies in a zone in between standard asset and NPA.

2 categories of SMA

SMA I ² Interest not paid within 30 days of notice SMA II ² Accounts that are not in default but display early

warning signals

For better follow-up

Stressed Assets Review (SAR), but only for accounts withoutstandings above Rs 10 lacs.



STRESSED ASSETS REVIEW

For accounts with outstandings above Rs 10lacs

SMA I, SMA II and sub standard assets

Branch level activity

Done in a time bound manner



Process Time Frame

Preparation and Submission

of report

10

Approval of measuresreccomended

5

Viability study if needed 45

TOTAL 60



SPECIAL BODIES

Stressed Assets Resolution Centre (SARC) NPAs originating in Business Process

Reengineering (BPR)

Follow-up

Filing of suit in DRTs or Civil Courts Appearing before the court

Seizure and sale of mortgaged assets

Formulation of rehabilitation package

Stressed Assets Management Branches ( S AMB) Deal with high value accounts i.e. accounts worth

Rs 50 lac or more, on an exclusive basis.



MEANING

ELIGIBILITY

REMEDIES AVAILABLE



The borrower is passing through

a temporary phase of loss making

Accounts only classified understandard, sub standard and doubtful categories may be

restructured

ayesha patnaik's sip ppt

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