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Profile image of International Research Journal Commerce arts science

" The three letters Strike terror in banking sector and business circle today ". NPA is short form of " Non Performing Asset ". The economic future of the country is wholly dependent on banking sector. The problem of NPA show signs of "persistent bane of hitherto developmental policies". "New stratagem is required to attempt effacing of the NPA menace". The significance of the paper is expected to be an immense use to fulfill consumer needs and facing competition with other banks. This study provides the information related to solve NPA problem. The study uses the annual reports of SBI for the period of year 2007-2008 to 2013-2014. The motive of present study is to assess the non performing assets of SBI and its impact on profitability & to see the relationship between Total Advances, Net Profits, NET & GROSS NPA. The study also includes advances and NPA of SBI groups by Priority & Non Priority sectors. The study has been analyzed by using tables and coefficient of correlation. The major reason of increased NPA is banks focal point on quantitative aspect of achieving targets and less attention being paid towards qualitative aspect of loan and credit disbursement of money & mismanagement of funds. INTRODUCTION NPA is short form of " Non Performing Asset ". We know the built up of NPA has been the major factor in destroying the profitability of the Public sector Banks in India, the Narasimham Committee (II) underscored the need to reduce the average level of NPAs of all banks and recommended prudential norms on income recognition, asset classification & provisioning. The dreaded NPA rule says simply this: when interest or other due to a bank remains unpaid for more than 90 days, the entire bank loan automatically turns a non performing asset [1]. The recovery of loan has always been problem for banks and financial institution [1]. To come out of these first we need to think is it possible to avoid NPA, no cannot be then left is to look after the factor responsible for it and managing those factors [3]. With a view to moving towards international best practices and to ensure greater transparency, it has been decided to adopt the " 90 days' overdue' norm for identification of NPAs, from the year ending March 31, 2004 [3].

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International Res Jour Managt Socio Human

Banking industry plays a significant role in the development of any economy as it caters to the needs for all the sections of the society.The modern economies of the world have developed primarily by making best use of the credit availability in their systems. India is on the march; far reaching socio-economic changes are taking place and Indian banks should come forward to play this role in the process. The role of banks has been important, but it is going to be even more important in the future. In this context giving due importance and consideration for the growth of banking sector is considered to be the need of the hour. Therefore this paper is an attempt to study the importance of both public sector and private sector banks in the development of Indian economy.

research paper on npa of sbi bank

The Indian banking sector has been facing serious problems of raising Non-Performing Assets (NPAs). The NPAs growth has a direct impact on profitability of banks. Non-performing assets are one of the major concerns for public sector banks in Pune district. There seems to be no unanimity in the proper policies to be followed in resolving this problem. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. NPAs affect the liquidity and profitability, in addition to posing threat on quality of asset and survival of banks. The problem of NPAs is not only affecting the banks but also the whole economy. In fact high level of NPAs in Indian banks is nothing but a reflection of the state of health of the industry and trade. It is necessary to trim down NPAs to improve the financial health in the banking system. An attempt is made in this paper to understand NPA, the status and trend of NPAs on public sector banks in Pune district. Keywords: NPA's, public sectors banks, Indian economy and recovery of NPA's etc.

Private Sector Banks (PSBs) in India have performed rather poorly over the past 3-4 years. For the most part this has been on account of Non Performing Asset (NPA) related worries which have so far been brushed under the carpet. The current level of NPAs as disclosed by most private sector banks is far from reality and made possible because of the flexibility enjoyed by PSBs in terms of disclosure requirements .A healthy and a sound banking system are very essential for an economy in order to grow and remain in this competitive environment. RBI and other regulatory bodies have taken several policies in the light of developing the functioning of the banking sector. The best indicator for the health of the banking industry in a country is its level of Non-performing assets (NPAs). It reflects the performance of banks. NPAs in the Indian banking sector have become a major concern for the Indian economy. NPA has a direct impact on the profitability, liquidity and solvency position of the bank. Higher NPA indicates inefficiency of the bank and lower NPA indicate better performance and management of funds. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled. This paper basically deals with the trends of NPA in banking industry, the factors that mainly contribute to NPA raising in the banking industry and also provides some suggestions how to overcome this burden of NPA on banking industry. Keywords: Private sector Banks, Non-Performing Asset and Banking system etc. Introduction A non performing asset (NPA) is a loan or advance for which the principal or interest payment remained overdue for a period of 90 days. The most important business implication of the NPAs is that it leads to credit risk management assuming priority over other aspects of bank's functioning. The bank's whole machinery would thus be preoccupied with recovery procedures rather than concentrating on expanding business. A bank with a high level of NPAs would be forced to incur carrying costs on non-income yielding assets. Other consequences would be reduction in interest income, high level of provisioning (as banks are required to keep aside a portion of their operating profit as provisions, as NPAs increases banks have to increase the amount kept aside as provisions which will reduce their net profits) stress on profitability and capital adequacy, gradual decline in ability to meet steady increase in cost, increased pressure on Net Interest Margin (NIM) thereby reducing competitiveness, steady erosion of capital resources and increased difficulty in augmenting capital resources. Developing of sound and healthy

International Research Journal Commerce arts science

A strong banking sector is important for flourishing economy. The failure of the banking sector may have an adverse impact on other sectors. Non-performing assets are one of the major concerns for banks in India. NPAs reflect the performance of banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. The NPA growth involves the necessity of provisions, which reduces the overall profits and shareholders' value. The issue of Non Performing Assets has been discussed at length for financial system all over the world. The problem of NPAs is not only affecting the banks but also the whole economy. In fact high level of NPAs in Indian banks is nothing but a reflection of the state of health of the industry and trade. The paper deals with understanding the concept of NPAs, its magnitude and major causes for an account becoming non-performing, projection of NPAs over next three years in Public sector banks and concluding remarks. Introduction Granting of credit for economic activities is the prime duty of banking. Apart from raising resources through fresh deposits, borrowings and recycling of funds received back from borrowers constitute a major part of funding credit dispensation activity. Lending is generally encouraged because it has the effect of funds being transferred from the system to productive purposes, which results into economic growth. However lending also carries a risk called credit risk, which arises from the failure of borrower. Non-recovery of loans along with interest forms a major hurdle in the process of credit cycle. Thus, these loan losses a ffect the banks profitability on a large scale. Though complete elimination of such losses is not possible, but banks can always aim to keep the losses at a low level. Non-performing Asset (NPA) has emerged since over a decade as an alarming threat to the banking industry in our country sending distressing signals on the sustainability and educability of the affected banks. The positive results of the chain of measures affected under banking reforms by the Government of India and RBI in terms of the two Narasimhan Committee Reports in this contemporary period have been neutralized by the ill effects of this surging threat. Despite various correctional steps administered to solve and end this problem, concrete results are eluding. It is a sweeping and all pervasive virus confronted universally on banking and financial institutions. The severity of the problem is however acutely suffered by Nationalized Banks, followed by the SBI group, and the all India Financial Institutions.

Banking plays a very important role in the economic development of a nation. In fact, banking is the life blood of modern economy. It may truly be said that modern commerce is so dependent on banking that any cessation of banking activity, even for a day or two, would completely paralyze the economic life of a nation. From its original narrow scope and modest purpose of taking care of other people‘s money and lending a part of it, banking has developed to such an extent that, in countries like England, France and USA, there is hardly a business deal in which the assistance of a bank is not sought in one form or another.

Banking sector acts as backbone in the working of a strong economy system. Even though thebanks in India have shown spectacular performance but there has been significant decline in theproductivity and efficiency of the banks resulting in erosion of their profits. The presence of

NBFCs are being recognized gradually as complementary to the banking sector due to their customer-oriented services, simplified procedures, and attractive rates on deposits, flexibility and timeliness in meeting the credit needs of specified sectors. Being heterogeneous group of institutions performing financial intermediation in a variety of ways non-banking financial companies (NBFCs) are fast emerging as an important segment of Indian financial system. They raise funds from the public, directly or indirectly and lend them to ultimate spenders. They advance loans to the various wholesale and retail traders, small-scale industries and self-employed persons. They have broadened and diversified the range of products and services offered by a financial sector.

Indian banking sector has witnessed explosive growth and expansion ever since the era of economic reforms in the form of the liberalization, privatization and globalization was lunched nearly the two decades ago. The growth in the banking sector has created new windows of opportunity for women to find employment in this sector. Till now teaching, nursing, human resource management even medical profession were the areas where women were expected to excel as these were the areas where they could nurture, an extension in a sense of their mothering capabilities. On the contrary manufacturing, stock broking, banking and finance were considered males-only areas as these were assumed to be the areas where analytical skill and ruthless decision making were required instead of high emotional quotients and empathy which are considered to be "feminine" attributes. The attitude was not typical Indian foreign banks we have seven national banks in India at present which are headed by women. This fact clears that women are now entering the top echelons of Indian banking sector and their potential is well recognized by their employers.

Industrial, Corporate, and Infrastructure Performance:-As per released national accounts data, with 2011-12 as the base year, industrial growth was much better in 2012-13 and 2013-14 at 2.4 per cent and 4.5 per cent respectively. Growth in infrastructure, based on an index of eight core industries, has improved slightly to 4.4 per cent during April-December 2014-15 as compared to 4.1 per cent in the same period in 2013-14.

Today, World is on the threshold of a new revolution namely knowledge revolution. Society has undergone a paradigm shift and present shift is to knowledge society. Knowledge has emerged as the most important ingredient for success of any individual and organization and become imperative to survive and prosper. Knowledge is an intangible assets in an organizations and they must learn to manage their intangible assets, that is knowledge, to compete and become successful in own market and this practice is generally known as Knowledge Management (KM) or sometimes is referred to as business intelligence. Knowledge Management is fast gaining significance worldwide across industries of all types and banking. Indian corporate sector is undergoing a paradigm shift and adoption of concept of KM has become a strategic imperative rather than choice. Corporate sector is changing at high speed and high level of uncertainty and inability to predict future compel them to adopt KM to survive and prosper. Both public sector and private sector are endowed with adequate intellectual capital but they are not yet to adopt KM as strategic weapon for gaining competitiveness. KM is also viewed as a strategy of putting knowledge into action as a mean to increase organizational efficiency. This paper has a theoretical background and will explore historical perspective and concept of KM, Technical application and to


International Research Journal of Management Sociology and Humanities

International Res Jour Managt Socio Human , R. INDIRA


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