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CHAPTER I

INTRODUCTION

Non-performing Asset

An asset, which ceases to yield income to the bank, is a Non-performing

asset (NPA). Income in any loan account should be recogni ed only when there is

actual cash reco!ery and not merely when it is accrued.

A!ailability of security or net worth of borrower" guarantor should not be

taken into consideration for the purpose of treating an ad!ance as NPA or

otherwise. #nly the record of reco!ery as reflected in banks books should be the

criteria.

Non-performing assets cause $%ouble &eopardy' to banks because we cannot

book any income by way of interest, e change, fee, commission etc. unless there is

cash reco!ery or reali ation. #n the other hand, we are re uired to make pro!ision

on such NPA*s based on their age and !alue of security.

+or a bank in general, an asset is to be classified as NPA, if the payments

(principal and interest) remain unpaid for more than days. Any NPA would

migrate from substandard to doubtful category after / months. It would get

classified as loss asset if it is irreco!erable or only margin collectible.

MANAGEMENT OF NPAs:

0he uality and performance of ad!ances ha!e a direct bearing on the

profitability and !iability of banks. %espite an efficient credit appraisal and

disbursement mechanism, problems can still arise due to !arious factors. 0he

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essential component of sound NPA management system is uick identification of

Non-performing ad!ances, their containment at minimum le!els and ensuring that

their impingement on the financials is minimum.

C !ses for NPA :

0he issue of Non-performing asset has come to occupy the centre stage in the

discussion on India*s financial sector reforms and the international rating agencies

ha!e added to the concerns of the international financial community and the

multilateral agencies. 0he high le!el of NPA*s has e hibited the fundamental

weakness of the banks. 1ome of the causati!e factors for the loan accounts turning NPA*s are as follows2

. #ften lending is not linked to product sale. 0he problem is compounded by

directed lending where banks are re uired to e tend credit to meet targets

stipulated by the go!ernment, often disregarding the !iability of loans.

/. %i!ersion of funds for e pansion " moderni ation " setting up of new

pro&ects " helping or promoting associate concerns.

3. 4 ternal factors like raw materials shortage, raw material price escalation,

power shortage etc.

5. 6usiness failures like product failing to capture market, inefficient

management, strike" strained labor relations, wrong technology, technical

problems, product obsolescence etc.

7. 8hanges in the macro en!ironment like recession, infrastructural

bottlenecks, sluggish growth in the economy etc.

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9. :ack of financial autonomy

;. 0ime " 8ost o!errun while implementing the pro&ect

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+or a bank in general, an asset is to be classified as NPA, if the payments

(principal and interest) remain unpaid for more than days. Any NPA would

migrate from substandard to doubtful category after / months. It would get

classified as loss asset if it is irreco!erable or only marginally collectible.

C tegories of NPAs:

6anks are re uired to classify non-performing asset further in to the

following three categories based on the period for which the asset has remained

non-performing and the reliability of the dues.

T&PE% OF NON PERFORMANCE A%%ET%

a) 1ub-standard Asset

b) %oubtful Asset

c) :oss Asset

' %!(-st n) r) Asset:

A 1ub-standard Asset was one, which was classified as NPA for a period of

not e ceeding two years. A sub-standard asset is one which has remained NPA for

a period less than or e ual to < months. In such cases, the current net worth of the

borrower" guarantor or the current market !alue of the security charged is not

enough to ensure reco!ery of the dues to the banks in full.

( ' Do!(tf!* Asset:

A doubtful asset was one, which remain NPA for a period e ceeding two

years. A loan classified as doubtful has all the weaknesses inherent in asset that

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were classified as sub-standard, with the added characteristic that the weakness

make collection or li uidation in full on the basis of currently known facts,

conditions and !alue highly uestionable and improbable +

,' oss Asset:

A loss asset one where loss has been identified by the bank or internal

e ternal auditors or the >6I inspection but the amount not been written wholly. In

other words such an asset is considered uncollectible and of such little !alue that

its continuance as a bankable asset is not warranted although there may be some

sal!age or reco!ery !alue.

NET NON PERFORMANCE A%%ET%

It will thus be obser!ed that o!er the years the banks ha!e made offers

0o reduce the non performance assets . which are drain on their profitability

?anagement of non performing assets is one of the important areasin banks

@eep the non-performing under control

?anagement non-performance assets with special reference toholding

Performance >eco!ery procedures problems and difficulties

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MEA%URE% TA.EN /& CO-OPERATI0E FOR RECO0ER& OF NPAs:

a' Person * ,ont ,t is t#e first step in re,o1er2

8ontact the person who making delay for payment personally, and

understand his problem for payment

(' E r*2 A*ert %2stem

All the accounts displaying unsatisfactory features"early warning signals are

on the threshold of falling into NPA category, if the bank does not take cogni ance

of the same and initiate remedial action.

,' " t,# C tegor2 A,,o!nts >6I describes $1pecial mention account' as an asset which e hibits signs of

sickness"irregularities. 0hey are gi!en the names as $ atch' and $1pecial atch'

category accounts in our 6ank. e ha!e to place accounts in atch"1pecial.

" t,# , tegor2 3#en t#e fo**o3ing s2mptoms of si,4ness re seen+

a) Non-payment of one uarterly interest" installment

b) +re uent re uests for e cess drawings o!er the limit

c) +re uent return of bills purchased"che ues sent for collection

d) 8he ues issued are returned for financial reasons

e) Non-submission of stock statements

)' Contin!o!s %!r1ei** n,e %t tements

#ne of the best tools that is a!ailable to the branch to ha!e a good slippagemanagement is the continuous sur!eillance statement. 6ranches are free to adopt

preparation of the same e!en for less than >s lacs working capital facilities.

Bltimately it is only the monitoring system that is de!ised to see the health of the

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borrow accounts at the end of e!ery month and to take correcti!e steps where!er

necessary.

e' T#ro!g# Compromise %ett*ement

1e!eral schemes were put in place framed both by >6I and by the banks on

their own, initially !alid for a shorter duration and later on e tended to enable the

banks reco!er those hard core NPAs where reco!ery was not possible under normal

circumstances and to pro!ide relief to those who were affected.

6asically, it is an attempt that pro!ides a lot of relief to the affected person

who has already suffered some loss or other in his business acti!ity which forcedhim not to keep up his commitments and honor the claims of the bank. 0his has

pro!ed to be one of the best a!enues to the banks to reduce their NPA portfolio.

hile di!ergent !iews are e pressed about the one time"negotiated settlement

schemes, the fact remains that this has pro!ed to be the best possible way of

reco!ery in the cases where reco!ery had otherwise pro!ed to be difficult.

f' T#ro!g# t#e De(t Re,o1er2 Tri(!n * 5DRT'

%ebt >eco!ery 0ribunals are special uasi-&udicial forums established under

the pro!isions of >eco!ery of %ebts due to 6anks and +inancial Institution Act,

3 for speedy reco!ery of loans. %ebt >eco!ery Appellate 0ribunals (%>A0s)

are the appellate bodies where all appeals arising out of the orders passed by %>0s

are filed. A person in the rank of a %istrict Cudge is the Presiding #fficer of %>0.

%>A0 is presided o!er by a 8hair Person who is in the rank of Digh 8ourt Cudge.

0he Pecuniary &urisdiction is >s. :acs and abo!e. 0he 0ribunals will ha!e

territorial &urisdiction. #nly 6anks and +inancial Institutions can a!ail of the

benefit from the 0ribunals. 0he :aw of :imitation is applicable. 0he 0ribunals are

mainly guided by the Principles of Natural Custice.

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0here are / %>0s in IN%IA at present and 7 %>A0s. 0he %>A0s are

located in ?umbai, %elhi, @olkata, 8hennai and Allahabad. As per the latest

amendment to the Act which is effecti!e from ;. ./ , debt includes any

liability which is assigned or is payable under any arbitration award or under amortgage. %>A0 can transfer, on application, any case from one tribunal to

another. If another 6ank has a claim against the same person, then that 6ank can

&oin the case before the final order is passed sub&ect to separate fees. 0he 0ribunals

has powers to order Attachment, to appoint a recei!er and to appoint a

8ommissioner for preparation of In!entory or for sale. 0he >eco!ery #fficer is

empowered to re uire the %ebtor to declare on affida!it the particulars of his or its

assets

g' Re,o1er2 of NPA t#ro!g# *o,4 )!* te

:ock Adulate is a process of administering &ustice. It is a !oluntary process

and works on the Principle that both parties to the dispute are willing to sort out

their disputes amicably. 0hrough this mechanism, disputes can be settled in a

simpler, uicker and cost-effecti!e way.

0he :ock Adulate is not a new concept. It is uite old and has its roots in

Panchayat Adulates. 0he system, howe!er, has remained out of tune for long. 0he

Parliament, by enacting the :egal 1er!ices Authorities Act

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INDU%TR& PROFI E

MEANING AND %UGGE%TION OF CO-OPERATI0E%

A cooperati!e society $is a !oluntary association of indi!idual who &ointogether on !oluntary basis for the furtherance of their common economicinterest $.

CO-OPERATI0E %OCIET& IN INDIA

IN 5 ,the first central co-operati!e act was passed in India andstarted the first co-operati!e society in madras city by sir >a&agopalachari(3 .

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CO-OPERATI0E %OCIET& IN NAGAPATTINAM

Nagapattinam co-operati!e works according to the cooperati!e rules duringthe year

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members . It purchases goods on wholesale basis and there on to itsmembers at fair price . 0here by it eliminates middlemen in the channelof distribution . the forms of cooperati!e ha!e been recei!ing 8ourtsattention and help them a with to contribution the general problem of

price rise .

Ho!sing ,o-oper ti1e so,ieties

Dousing co-operati!e societies are formed to pri!ate house to their members either on ownership basis. 0hey grant loans to the members for construction of house some times to the society.

M r4eting ,o-oper ti1es

0he marketing co-operati!es are the association of independent procedures organi ed for the sales of there .

Co-oper ti1e ,re)it so,ieties

8o-operati!e credit societies are formed to pro!ide financialassistance in the form of direct loans to their members.

PRINCIP E% OF CENTRA CO-OPERATI0E /AN.ING

=uidelines, which influence in the financing are certain of a central bank.

1prit of social welfare 2 the central banking in e!ery country is anon E profit organi ation . 0his feature differentiates it from thecommercial banks. the central bank is to set up control o!er the entire

banking structure in the society in the interest of the public .

=rowth with monetary stability 2 A central bank is an bankinginstitution the country.

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4ntrusted with the task by resolution of money supply in the country. 0he central bank act as an influent de!elopment while acting in their direction should not target to maintain monetary stability in thecountry .

+reedom from political influence 2 A central bank should beindependent of all political influence if it is to work for thede!elopment of the country . the ruling parties may change in thecountry but it should not allow itself to be dominated by the ideology of a particular political party . 6ut it does not mean that it should notinfluenced =o!ernment Policies . it is always necessary that thereshould be perfect cooperation between the central bank and

=o!ernment of the country it is fact de!elopment of economy is toachie!ed .

MERIT% OF CO-OPERATI0E %OCIETIE%

4asy information1er!ice moti!e%emocratic managementA!oidance of e ploitation1uitability?inimum o!er head cost1cope of self go!ernment

IMITATION%

Bnsuitable for large business

Bn efficient managementAbsence or moti!ationAttitude or memberseakness in its lending system:ack of secrecy

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FUNCTION% OF CO-OPERATI0E

T#e2 perform n!m(er of f!n,tions t#e2 re:

0hey main function of the Nagapattinam %istrict central cooperati!e bank is to lend to the primary credit societies . 0hey pro!ide short termand medium term loan the primary credit societies. 0hey finance the

primary credit societies and thereby enable them to e tend credit tofarmers. 0hus, they play a !ital role in rural finance.0he function as the balancing central and assist in transferring thee cess primary society which is need of the funds .

0hey raise loans and ad!ance from the sate cooperati!e banks thesate cooperati!e banks and lend the same to the primary credit societies.0hus they act as a link between the state cooperati!e bank and they

primary credit societies .

0hey raise loan deposit from the members as well as non members for the purpose of the meeting the credit re uirements of the primary creditsocieties.

0hey super!ise and guide to the affiliated primary credits societies.

0hey also carry on commercial banking operation. such as acceptance of type of deposit from the general public granting of loans and ad!anceto the needy against proper securities discounting of bill collect che ueand bills on behalf of their customer , recei!ing of !aluable of safecustody etc.

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INDIAN /AN.ING INDU%TR&

0he Indian 6anking industry, which is go!erned by the 6anking >egulation

Act of India, 5 can be broadly classified into two ma&or categories. Non-scheduled banks and 1cheduled banks. 1cheduled bank comprise commercial bank

and the co-operati!e banks. In terms of ownership, commercial bank can be further

grouped into nationali ed banks, the 1tate 6ank of India and its group banks,

regional rural banks and pri!ate sector banks. 0hese banks ha!e o!er 9;,

branches spread across the country.

0he first phase of financial reforms resulted in the nationali ation of 5ma&or banks in 9 and resulted in a shift from 8lass banking to ?ass banking.

0his in turn resulted in a significant growth in the geographical co!erage of banks.

4!ery bank had to earmark a minimum percentage of their loan portfolio to sectors

identified as $priority sectors'. 0he manufacturing sector also grew during the

; s in protected en!irons and the banking sector was a critical source. 0he ne t

wa!e of reforms saw the nationali ation of 9 more commercial banks in < .

1ince then the number of scheduled commercial banks increased four-fold and the

number of bank branches increased eight-fold.

After the second phase of financial sector reforms and liberali ation of the

sector in the early nineties, the Public 1ector 6anks found it e tremely difficult to

compete with the new pri!ate sector banks and the foreign banks.

0he new pri!ate sector banks first made their appearance after the guidelines permitting them were issued in Canuary 3. 4ight new pri!ate sector banks are

presently in operation. 0hese banks due to their late start ha!e access to state-of-

the-art technology, which in turn helps them to sa!e on manpower costs and

pro!ide better ser!ices.

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%uring the year / , the 1tate 6ank of India (16I) and its ; associates

accounted for a /7 percent share in deposits and /

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0he 6ank*s agenda for the immediate future includes offering custodial

ser!ices to clients and enlarge operation in the 8apital ?arket and :easing G hire

purchase business. #ur aim is to concentrate in areas of In!estment 6anking, +ore

0rading, Pro&ect +inance, Institutional Asset ?anagement and Personal 6ankingco-operati!e also target to make itself a one-stop 6anking center for corporate

sector. 0he 6ank*s strength is in >etail 6anking. Anchored to the tradition in

offering new products in the personal 6anking segment, the 6ank will continue to

inno!ate for the benefit of the indi!idual customer.

8o-operati!e is big enough to ser!e the world and small enough to know

e!eryone. 1uccess in the implementation of program for planned depends to a

large e tent on the a!ailability of ade uate financial resources for a wide !ariety of

pro&ect. In Fiew of the task and !ast si e of the country it was also decided to

setup more branches all o!er the India. 0he co-operati!e function in India can be

broadly classified into two types. 8o-operati!e urban, rural, has a group from the

prep under and part of the organi ed agriculture system.

Re)!,tion in NPA%

0he 6ank reco!ered nearly 9 cores of hard-core problem credit during the

year. Accordingly the 6ank*s ratio of net NPA1 drastically declined from ;.95 to

9./9 during the year. 0he 6ank pro!ides assistance in completion of legal

documentation and also organi ing funds and assistance in arranging in working

capital finance. 0he 6ank*s agriculture business is running !ery successfully because the bank pro!ides low interest to farmers. 0he 6ank always has fulfilled

his obligation to the priority sectors. 0his is the success of Indian #!erseas 6ank.

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In1estment

0he 6ank*s net domestic In!estment Port folio e panded from 9,5//.5

crores to >s.;, . crores. ?arked to ?arket portion of in!estments was

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production through rain water har!esting technology has raised the li!ing standards

of small farmers by gi!ing them an income of >s./,3 9 in 97 days.

Person * / n4ing in ,o-oper ti1e ( n4

At co-operati!e, the customer has always been the first priority. 8o-

operati!e ha!e a spectrum of tailor made sa!ing schemes to suit the !arying needs

of e!eryone and numerous loan schemes to meet the re uirements of e!eryone.

#ur array of ser!ice includes 8redit, 1afe %eposit :ockers, 0ra!elers 8he ues,

=ift 8he ues and >emittance facilities. 8o-operati!e deposit schemes embrace all

classes including the economically disad!antaged section of the society and suit!arious age groups. 8o-operati!e was the first to introduce the >ecurring %eposit

way back in 7.

Ot#er Deposit %,#emes

1a!ings %eposit

+i ed %eposit>ein!estment %eposit Plan

>ecurring %eposit

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CO-OPERATI0E /AN. %CHEME%

Deposit o ns

% 1ings )eposit 8urrent deposit (indi!idual )

8urrent deposit (societies)

1pecial fi ed deposit

8all deposit societies

?atured +.% deposit

?ahatma cash certificate

(indi!idual)

8ash certificate (societies)

1ecurity deposit of society

employee

Permanent income plan

8umulati!e benefit deposit

%raft payable

4yesores* price certificate

>ecurring deposit

1ubsidy >.+ Account

Interest or matured deposit >eser!e fund of societies

Person * segment Dousing mortgage loan

indi!idual

orking women loan

?.t.c agriculture loans

Cewels loans

Cewels loan (N+1)

:oan to pension

Dousing loan to indi!idual

P.A.8.6 Cewel loan

@inas credit card

omen micro credit salary

loan indi!idual

?arketing society general

1>0 to loan indi!idual

Petty traders loan to

indi!idual

Agriculture G allied acti!ities

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CHAPTER -II

O/@ECTI0E OF THE %TUD&

Prim r2 o( e,ti1e:

0o analyses the effecti!eness of reco!ery of Non-performing asset in the

co-operati!e bank, kumbakonam 6ranch.

%e,on) r2 O( e,ti1e:

0o assess the position of non-performing assets in Nagapattinam %istrict

8entral 8o-operati!e 6ank.

0o study the effect of non-performing assets on the financial health of the

bank and reco!ery of co-operati!e credit.

0o e amine the factors for default of 8o-operati!e credit thereby increase in

Non-performing Assets.

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%COPE OF THE %TUD&

At present co- operati!e is facing a serious problem of slipping of

performing assets to non - performing assets. 1o the main need of this study is to

identify the areas where the (NPA) can be reco!ered easily and know the

effecti!eness of its reco!ery.

8o-operati!e is facing a hea!y competition from both public and pri!ate

sector banks, therefore they issuing loans without good credit appraisal. 0his leads

to increase NPAs.

#nce a performing asset slipped to non performing asset, the reco!ery is the

ma&or problem faced by the banks.

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IMITATION% OF THE %TUD&

Analysis is mainly based on secondary data.

8ertain information G data which cannot be accessed or published

because it is confidential. 0he basic policy of any banking institution -

maintaining secrecy and honoring client*s trust of the bank.

%ifficulty in procuring ade uate number of statements, hence the sample

si e being small.

0he inferences and conclusions are purely based only on the fi!e year

financial statements from the bank.

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CHAPTER -III

RE0IE" OF ITERATURE

Non-Performing Assets n O1er1ie3

$All sales are actually a gift until the proceeds ha!e been collected'

Prof. ?.6ertoneh In the year , the =o!ernment of India had appointed a

high le!el committee under the chairmanship of 1hri.?.Narasimham, popularly

called Narasimham committee, to e amine all aspects relating to the structures,

organi ation, function and procedures of the financial system. 0he committee had,inter alia made recommendation in regard to proper system of recognition of

income, classification of asset and pro!isioning for bad debts on a prudential basis.

0he >eser!e 6ank of India, in tune with the internationally accepted

accounting norms and as per the Narasimham committee recommendations,

introduced new guidelines for Income recognition, asset classification and

pro!isioning norms operati!e from the financial year /- 3. ith the

introduction of the new norms from the year /- 3, the concept of performing

and Non-performing assets has been introduced.

Definition

An asset, including a leased asset, become non-performing when it ceases to

generate income for the bank, A non-performing asset (NPA) was defined as $acredit facility in respect of which the interest and" or in installment of principal has

remained Hpast due* for a specified period of time'. An amount due under any

credit facility is treated as Hpast due* when it has not been paid within 3 days from

the due date.

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6anking regulatory authorities, policy makers and researchers alike are

interested in research on NPAs. 1ince prudential norms ha!e been implemented in

co-operati!e banks only from -/ , the study of NPAs in co-operati!e banks

is a relati!ely new field of study. Dence, literature of empirical studies on the

sub&ect is limited. Dowe!er, delin uency of co-operati!e credit is the ob&ect of

en uiry for many committees and researches.

A brief re!iew of these studies is presented here. 1ince !ery few studies ha!e

been done on NPA in co-operati!e banks, the studies on (i) 8o-operati!e credit (ii)

4ffect of o!erdues and NPAs (iii) >eco!ery and (i!) +actors influencing non-

payment of dues, ha!e been re!iewed.

N i4$ et *+$ 56==6' while re!iewing the role of credit co-operati!es in rural

de!elopment within Andhra Pradesh has concluded that cooperati!es were the

most suitable institution for loan disbursement in thearea.39

1egynola ( /) has stated that the impact of the co-operati!e societies in Nigeria was

mainly in the areas of mobili ation " allocation of resources, di!ersification of rural

economy , the pro!ision of items of wealth, and the distribution of manufactured goods to

members.3;

.is*e1 et *+$ 56==9' study has re!ealed that co-operati!e credit supported

intensi!e de!elopment of the family farm sector in Israel. 6ut mutual liability encouraged

o!er-borrowing when possible and could not be forced when needed.3eport of the Agriculture 8redit >e!iew 8ommittee ( < ) o!er

dues pre!ented recycling of funds, impaired refinance eligibility and producti!ity of co

operati!e banks. Nearly /9 per cent of the resources deployed by the credit agencies for

the agriculture sector were locked up in o!er dues and were not a!ailable for recycling.

At the institutional le!el, the clogging of o!er dues had se!erely impaired the eligibility

of the credit agencies, for refinance from NA6A>%. As a defaulter, the borrower is cut

off from any access to credit from institutions. 0his affects his producti!e enterprise.57

0he 0arapore 8ommittee on 8apital Account 8on!ertibility(8A8) laid down that

7 per cent le!el of NPAs in banks is an important milestone to be reached for full

con!ertibility.59

According to the comparati!e study of NPA by 1athyanarayana (

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P# )nis 56===' &ustified the Narasimham 8ommitteeJs obser!ation that asset

uality was !ery poor in direct lending, since around 5< per cent of NPAs were in priority

sector ad!ances group.5

A,,or)ing to % m * 58;;8' NPA o!erhang was due to defects in legal processes

like prolonged " delayed legal system, absence of proper legal framework for non-

payment of bankJs dues.7K

T#e Report of t#e R!r * / n4ing En !ir2 Committee (0hakurdas 8ommittee)

( 5 ) concluded that proper follow-up action was !ery essential. 6anks ha!e to maintain

close contacts with the borrowers, keep track of the end-use of funds lent to the

borrowers effecti!e reco!ery of ad!ances as per the repayment schedule.7

T#e Report of t#e %t!)2 Gro!p to fr me g!i)e*ines for fo**o3-!p of ( n4

,re)it (0andon 8ommittee) ( ; ) framed guidelines for monitoring and follow up of

bank credit. It suggested norms for holding raw materials, stock in process, finished

goods, recei!ables and bills purchased and discounted.7/

T#e Report of t#e "or4ing Gro!p to Re1ie3 t#e %2stem of C s# Cre)it

(8hore 8ommittee) ( ; ) stressed the need to strengthen the monitoring system and

suggested simplification of the information system proposed by the 0andon

8ommittee.73

T#e Report of t#e Committee on Me,# ni tion in / n4ing In)!str2

(>angara&an 8ommittee) (

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T#e Report of t#e Committee of Top E e,!ti1es ( egistrar

were the ma&or problems of arbitration. 79

Gop * 4ris#n n 56==B' suggested that the bad effect of %ebt >elief 1chemes

should be erased from the minds of borrowers.7; According to Cain et al., ( 9) the loan

wai!er schemes had succeeded in redemption of old dept but reco!ery of fresh loans was

a ma&or problem faced by the co-operati!e farm credit sector in ?adya Pradesh. 7' estimated that more than three M fourths

of the o!erdues were due to willful default. +aulty lending policies, failure to link credit

with marketing , lack of will on the part ofmanagement to take strong action against

recalcitrant and willful defaulters, lack of financial discipline and apathetic of some of the

1tate =o!ernments towards creating an en!ironment conduci!e and congenial to

repayment of dues were the causes for o!erdues.9

D )#i,# 56= ' specifically threw light on willful default. De found that there

was strong association between repayment and caste, crops grown, fertili er utili ation,

occupational pattern and irrigation. 0he main causes found for willful default were re-

lending practices, which enabled to make profit out of the interest margins.;

0he >6I conducted a special study in ;A+I8A>% ( < ) while endorsing the findings of the %t!)2 Te m On

O1er)!es found that in many cases the default was willful and that too it was by the big

farmers.;/

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Go2 *$ et *+$ 56==9' conducted a study on Disal %886, Daryana. 0he defaulted

borrowers utili ed a relati!ely larger proportion of their total earnings for consumption

purposes, thereby lea!ing less for in!estment in

production processes .;

* n) %ing# 56==9 ) studied the misutili ation of co-operati!e credit in

agriculture in @ukathala of Achnera block of Area district and found that marginal and

small farmers i.e., weaker sections misutili ed ama imum per centage of loans.eports

+inancial 1tatements

?onthly statements of reco!ery of NPAs

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Gross NPA:

=ross NPAs are the sum total of all loan assets that are classified as NPAs as per

>6I guidelines as on 6alance 1heet date. Gross NPA ref*e,ts t#e ! *it2 of t#e

*o ns m )e (2 ( n4s+ It consists of all the non standard assets like as sub-

standard, doubtful, and loss assets.

Gross NPAs Gross NPAs

Gross A)1 n,es

Net NPA:

Net NPAs are those type of NPAs in which the bank has deducted the pro!ision

regarding NPAs. Net NPA s#o3s t#e ,t! * (!r)en of ( n4s+

Net NPAs Gross

NPAs Pro1isions

Gross A)1 n,es - Pro1isions

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CHAPTER 0

DATA ANA&%I% AND INTERPRETATION

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%UGGE%TION%

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CONC U%ION

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/I/I OGRAPH&

LAI6#8 1keptical of >e!ised NPA Norms.L T#e Hin)! /!siness ine (@olkatta) /7

?ay / 2 .

4N1 4conomics 6ureau. LNarasimham >eport +laya 6anks on NPAs.L Ne3In)i n

E press /5 Apr,/ 2 . L1tatutory 6ank Audit.L T#e C# rtere) A,,o!nt nt 59. (?ar.

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6rahamananda. L>6I >eport on 0rend and progress in 6anking-Interest Income asa

?easure of Fiability.L T#e Hin)! /!ssiness ine / No!. 25.

%as, %ebrata. LBlilisation pattern of 8o-operating 8redit2A 8ase 1tudy.L Cooper ti1e

perspe,ti1e 39.5(Can.-?ar. / /)2 /3-/ .

Da&ela, 0. N. Prin,ip*es$ pro(*ems n) pr ,tise of Co-oper tion+ Agra2 1hi!alal

Agarwala, /.

6idani, 1. N. M n ging Non-Performing Assets in / n4s+ New %elhi2 Fision

6ooks, / /.