Non Performing Assets The Great Challenge Before The Public Sector Banks
Non Performing Assets The Great Challenge Before The Public Sector Banks
Non Performing Assets The Great Challenge Before The Public Sector Banks
A study on
By
NIROOP K MURTHY
REG. No:09SKCMA043
EMPOWERING MINDS
2009 – 2011
1 . INTRODUCTION
After liberalization the Indian banking sector developed very appreciate. The RBI also
nationalized good amount of commercial banks for proving socio economic services to the
people of the nation.
The Public Sector Banks have shown very good performance as far as the financial
operations are concerned. If we look to the glance of the financial operations, we may find that
deposits of public to the Public Sector Banks have increased from 859,461.95crore to
1,079,393.81crore in 2003, the investments of the Public Sector Banks have increased from
349,107.81crore to 545,509.00crore, and however the advances have also been increased to
549,351.16crore from 414,989.36crore in 2003.
The total income of the public sector banks have also shown good performance since the
last few years and currently it is 128,464.40crore. The Public Sector Banks have also shown
comparatively good result. The gross profits of the Public Sector Banks currently 29,715.26crore
which has been doubled to the last to last year, and the net profit of the Public Sector Banks is
12,295,47crore.
However, the only problem of the Public Sector Banks these days are the increasing
level of the non performing assets. The non performing assets of the Public Sector Banks have
been increasing regularly year by year. If we glance on the numbers of non performing assets we
may come to know that in the year 1997 the NPAs were 47,300crore and reached to 80,246crore
in 2002.
The only problem that hampers the possible financial performance of the Public Sector
Banks is the increasing results of the non performing assets. The non performing assets impacts
drastically to the working of the banks. The efficiency of a bank is not always reflected only by
the size of its balance sheet but by the level of return on its assets. NPAs do not generate interest
income for the banks, but at the same time banks are required to make provisions for such NPAs
from their current profits.
I am interested in the banking sector and I want to make my future in the banking
sector so decided to make my research study on the banking sector. I analyzed first the factors
that are important for the banking sector and I came to know that providing credit facility to the
borrower is one of the important factors as far as the banking sector is concerned. On the basis of
the analyzed factor, I felt that the important issue right now as far as the credit facilities are
provided by bank is non performing assets. I started knowing about the basics of the NPAs and
decided to study on the NPAs. So, I chose the topic “Non Performing Assets the great challenge
before the Public Sector Banks”.
• To understand the impacts of NPA’s on the operations of the Public Sector Banks
4. RESEARCH METHODOLOGY
RESEARCH DESIGN
The research design tells about the mode with which the entire project is prepared. My
research design for this study is basically analytical. Because I have utilised the large number of
data of the Public Sector Banks.
5. SAMPLING DESIGN
The primary data would not be useful until and unless they are well edited and tabulated.
When the person receives the primary data many unuseful data would also be there. So, I will
analyse the data and edit them and turn them in the useful tabulations. So, that can become useful
in my report study. With use of analysed data I will manage to prepare my project report. But the
analyzing of data would not help the study to reach towards its objectives. The interpretation of
the data is required so that the others can understand the crux of the study in more simple way
without any problem so I will add the chapter of analysis that would explain others to understand
my study in simpler way.
RESEARCH LIMITATIONS
• It’s critical to gather the financial data of the every bank of the Public
Sector Banks so the better evaluations of the performance of the banks are not
possible.
• Since my study is based on the secondary data, the practical operations as related
to the NPAs are adopted by the banks are not learned.
• Since the Indian banking sector is so wide so it was not possible for me to cover
all the banks of the Indian banking sector.
7. CHAPTER SCHEME
Chapter 1- INTRODUCTION
Which includes Introduction part, Need for the study, Statement of the
problem, Scope of the study, Hypothesis, Objective, Research design,
Sample design, Source of data, Tools of analysis, Limitation of Study.
Which includes brief introduction about the Indian Banking Industry and
their reforms.
Chapter 6- CONCLUSION
This chapter gives conclusion of the study.