Executive Summary Abstract: The accumulation of huge non-performing assets in banks has assumed great importance.

The depth of the problem of bad debts was first realized only in early 1990s. The magnitude of NPAs in banks and financial institutions is over Rs.1,50,000 crores. While gross NPA reflects the quality of the loans made by banks, net NPA shows the actual burden of banks. Now it is increasingly evident that the major defaulters are the big borrowers coming from the non-priority sector. The banks and financial institutions have to take the initiative to reduce NPAs in a time bound strategic approach. Public sector banks figure prominently in the debate not only because they dominate the banking industries, but also since they have much larger NPAs compared with the private sector banks. This raises a concern in the industry and academia because it is generally felt that NPAs reduce the profitability of banks, weaken its financial health and erode its solvency. For the recovery of NPAs a broad framework has evolved for the management of NPAs under which several options are provided for debt recovery and restructuring. Banks and FIs have the freedom to design and implement their own policies for recovery and write-off incorporating compromise and negotiated settlements. Objectives: The basic idea behind undertaking the Grand Project on NPA was to: To evaluate NPAs (Gross and Net) in different banks. To study the past trends of NPA To calculate the weighted of NPA in risk management in Banking To analyze financial performance of banks at different level of NPA To evaluate profitability positions of banks To evaluate NPA level in different economic situation. To Know the Concept of Non Performing Asset To Know the Impact of NPAs To Know the Reasons for NPAs To learn Preventive Measures Recommendations : Bank should check the credibility of farmer like the proper identification and also his/her reputation in the village. Banks have to find out the original reasons for the loan. Proper identification of the guarantor should be check by the bank and his/her wealth also, so that he/she cant mislead the bank. Sarpanch of the village should also inquire before the disbursement of the loan amount.

Agriculture loan comes in priority sector, so banks are bound to achieve the targets set by government. In this situation government has to relax some norms about the priority sector. The stocks and receivables are to check randomly by the bank, so that the bank are aware of position of the firms. Banks have to be assure that the collateral security should not be disputed asset and neither any other loan is taken on that security. Banks have to make a separate department, whose duty is only inquire the personnel goodwill in the city apart from the financial asset. In the export related loan, banks have to check the authenticity of the firm with the export house. Banks should have to consider the market condition of economy before disbursement of loan in case of import, export. Banks also have to consider the market condition of that product, which is going to export or import. The recovery process is very slow, so the governments have to update the process which is fast and effective. And last not the least, the bank officers shouldnt forget the ethics of doing job. Limitations: The first limitation is authenticity of data, the data which I get from the bank is molded, because bank doesnt want to reveal the original facts. The other limitation is the traveling factor, because for the primary study I have to go Chandigarh, circle office and that is very hectic from Gurgaon. Time factor is other limitation in this study, because the bank officials didnt have proper time to meet and solve mine queries. Some of my recommendations are not for all banks because they are basis on high cost.