A STUDY ON

NON-PERFORMING ASSET AT THE BANGALORE CITY CO-OPERATIVE BANK LTD. BANGALORE

A project report submitted in partial fulfillment of the requirements for Masters of Business Administration Of Sikkim Manipal University, INDIA

Submitted By

NAGARATHNA . S

Guided By
Mr. Lokesh T.C

Sikkim Manipal University Health Medical & Technological Sciences

Distance Education Wing

MANIPAL - 576104

SIKKIM MANIPAL UNIVERSITY HEALTH, MEDICAL & TECHNOLOGICAL SCIENCES MANIPAL

CERTIFICATE
This is to certify that the project work entitled

STUDY ON NON-PERFORMING ASSET AT THE BANGALORE CITY CO-OPERATIVE BANK LTD. BANGALORE
is the bonafide record of work done by NAGARATHNA . S in partial fulfillment of the requirements for the award of the degree of

Master OF Business Administration

during the academic year 2012 Name of the candidate: Nagarathna.S
Register Number: 521023258 Study Center: 02772 Signature of the Co-ordinator

DECLARATION
I hereby declare that the project report entitled

STUDY ON NON-PERFORMING ASSET AT THE BANGALORE CITY CO-OPERATIVE BANK LTD. BANGALORE

Submitted in partial fulfillment of the requirements for the degree of

Masters of Business Administration

To Sikkim Manipal University, India, is my original work and not submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes.

Place:Bangalore Date: 5th June 2012

Nagarathna.S Reg.No. ; 521023258

Learning Centre Certificate

This is to certify that the project report entitled

STUDY ON NON-PERFORMING ASSET AT THE BANGALORE CITY CO-OPERATIVE BANK LTD. BANGALORE

Submitted in partial fulfillment of the requirements for the degree of

Masters of Business Administration

Sikkim Manipal university of Health, Medical and Technological Sciences

Nagarathna .S
Has worked under my supervision and guidance and that of this report has been submitted for the award of any other degree, diploma, fellowship, or any other similar title or prizes and that the work has not been published in any journal or Magazine.

(Reg. No ) 521023258

Certified

ACKNOWLEDGEMENT

I express my deep sense of gratitude to N.MANJUNATHA General Manger, Bangalore, for permitting me to carry out this project work in their esteemed organization.

I take great pleasure in thanking my Internal Project guide, Mr. Lokesh T.C, for his valuable guidance, advice, encouragement and constructive suggestions thought this project.

I take this opportunity to thank my beloved parents and my entire family who have given me all the necessary financial and moral support during the course of this project.

I would want to extend my profound sense of gratitude to everyone who has helped me during the course of this project. I especially grateful to my respondents who have provided me the essential and valuable information needed for the successful completion of this project.

NAGARATHNA .S

CONTENTS
CHAPTER 1: INTRODUCTION OF THE TOPIC

Chapter Scheme Introduction about banking industry Co-operative Banks Evolution of Co-operative Banks Definition and Features of Co-operative Bank Structure of Co-operative Bank Introduction to Non-Performing Assets RBI Prudential of Norms the on the

1 5 13 17

19

20 25

recommendations

Narasimham

Committee in the year 1992-93

32

Impact of Non-Performing Assets General causes of Non- Performing Assets Measures to tackle Non-Performing Assets Introduction to Securitization Act 2002

34 35 36 40

CHAPTER 2: DESIGN OF THE STUDY

Title of the Study Statement of the Problem Needs & Importance of the study Objectives of the study Scope of the Study Methodology of the study Tools for the collection of data Limitations of the study Reference Period

43 44 44 45 45 46 46 47 47

CHAPTER 3: BANK PROFILE

History of The BCCBL

48

Trade mark of the Bank Goals & Objectives Vision Statement Organization chart of the Bank Branches Awards and Competitors Information Bank Administrative Committee

49 50 52 53 54 55 56

CHAPTER 4: ANALYSIS & INTERPRETATION

Reasons for NPAs in the bank Measures for the recovery of NPAs adopted by the bank Analysis and interpretation of the Study

62

63

63 - 101

LIST OF TABLES
SL. No
4.1

Table Title
Classification of NPA

Page No.
65

4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18

Gross NPA Ratio Net NPA Ratio Problem Asset Ratio Provision Ratio Sub- Standard Assets Ratio Doubtful Assets Ratio Percentage of total NPA to total Advances Percentage of Total NPA in Long term loans to total advances given in Long Term Loan Percentage of Total NPA in Short term loans to advances given in Short Term Loans Percentage of NPA in other loans to total advances given in other loans Percentage change in NPA to total advances Percentage change in NPA in Long term loans Percentage change in NPA in short term loans Percentage change in NPA in other loans Comparison of NPA to advances in Short term loans and total advances Comparison of NPA to advances in Short term loans and Total advances Comparison of NPA to advances in other loans and total advances

68 70 72 74 76 78 81 83 85 87 89 91 93 94 97 99 101

LIST OF GRAPHS
SL. No
4.10 4.11 4.12

Table Title
Classification of NPA Gross NPA Ratio Net NPA Ratio

Page No.
66 67 71

4.13 4.14 4.15 4.16 4.17 4.18 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18

Problem Asset Ratio Provision Ratio Sub- Standard Assets Ratio Doubtful Assets Ratio Percentage of total NPA to total Advances Percentage of Total NPA in Long term loans to total advances given in Long Term Loan Percentage of Total NPA in Short term loans to advances given in Short Term Loans Percentage of NPA in other loans to total advances given in other loans Percentage change in NPA to total advances Percentage change in NPA in Long term loans Percentage change in NPA in short term loans Percentage change in NPA in other loans Comparison of NPA to advances in Short term loans and total advances Comparison of NPA to advances in Short term loans and Total advances Comparison of NPA to advances in other loans and total advances

73 75 76 77 82 84 86 88 90 92 94 95 98 100 102

CHAPTER 6: SUMMARY OF FINDINGS

Summary of findings

104

CHAPTER 7: SUGGESTIONS

Suggestions

107

CHAPTER 7: CONCLUSION

Conclusions

110

CHAPTER 8: ANEXURE

Annexure

112

CHAPTER 9: BIBLIOGRAPHY

Bibliography

115