PRIVATE AND

PUBLIC
SECTOR
BANKS
Prepared BySunny Khandelwal

INTRODUCT
ION
Non-Performing Assets:
An any assets ceases to generate income for the
bank
if the interest and/or principal amount have not
been received or remained outstanding for one
quarter from the day such income/installments has
fallen due

LOAN ASSETS

Performing
Assets (PA)

Standard Assets

Non-Performing
Assets (NPA)

Loss Assets

Sub-standard
Assets

Doubtful Assets

External Factors

Internal Factors

Ineffective recovery
tribunal

Defective Lending
process

Willful Defaults

Inappropriate
technology

Natural calamities

Improper SWOT
analysis

Industrial sickness

Poor credit appraisal

system

Lack of demand

Managerial
deficiencies

Change on Govt.
policies

Absence of regular
industrial visit

OBJECTIVES
OF STUDY
To study

and understand the basic concept of NPAs

To understand the causes of NPAs and its adverse
impact on banks
To understand the Recovery Strategies of NPAs
To know the presence of NPAs in a branch and its
trend
To analyze the reasons for an assets becoming NPAs
To know the major advances treated as NPAs
To analyze the major Recovery Mechanism and the
conversion rate of NPAs as Good assets

METHODOLOG
Y
NATURE

OF RESEARCH

The research methodology adopted during the project was

descriptive as well as analytical in nature .
DATA SOURCE

The data collected for the above problem is generally primary in

nature.

Primary Source:
Talking with managers
Questionnaire

Secondary Source:
Articles and Journals
Web sites (RBI and Banks)

SAMPLE SIZE

A survey was conducted in which 30 bankers and

officials were asked to fill the questionnaire.

RESEARCH APPROACH

The research approach used was survey and

questionnaire method which is a widely used method
for data collection and best suited for descriptive and
conclusive type of research survey includes research
instrument like online survey.

DATA
ANALYS
IS

Public Bank Branches have longer functioning duration as

compared to Private Bank Branches.
Public Bank Branches have observed longer duration NPAs as
compared to Private Bank Branches.
Public Bank Branches have greater NPAs percent as compared
to Private Bank Branches.
In Public Bank Branches the trend of NPAs is at high increase
as compared to Private Bank Branches.
In Public Bank Branches fraudulent practices, lack of proper
verification and lack of timely actions are the reasons for
assets becoming NPAs as compared to Private Bank Branches.
Private Banks as well as Public Banks has similar recovery
strategy in all regions and geographical regions.

In

Private Banks Improper credit appraisal and willful

default are the major reasons whereas in Public Banks lack
of effective follow-up, willful default and management
failure are the major reasons for NPAs in banks.
Both Public Banks and Private Banks adopt one time
settlement scheme and corporate and restructuring as an
effective tool for recovery of NPAs.
Private Banks is more effective in converting their NPAs
into good assets as compared to Public Banks.
Private Banks cant say that whether the reduction
techniques adopted by them helped to increase the
profitability whereas Public Banks say that profitability has
definitely not improved.
Agricultural loans as well as Personal loans are the major

LIMITATIONS
OF THE STUDY
Lack

of prior research study on the topic.

Lack of availability of required data and the
respondents.
Lack of measures used to collect the data.
Lack of availability of primary data.
Questionnaire method involves some uncertainty of
response. Co-operation on the part of informants, in
some cases, was difficult to presume.
It is possible that the information supplied by the
informants may be incorrect. So, the study may lack
accuracy.

& SUGGESTIONS
The banks should try to keep the percent of NPAs as lower as
they can through the effective and efficient polices and
strategies. By following the above the banks can reduces the
trend of NPAs from highly increasing to either constant or to
decreasing level.
The banks to analysis the major reasons that force to the NPAs
and take corrective actions to reduce them.
The banks should become strict though there polices while
giving advances to agricultural loans of personal loans as most
of these advances becomes NPAs
The banks should adopt one time settlement scheme or
corporate and restructuring as a recovery mechanism.

BIBLIOGRAP
HY
Ahmed and Khan Massod, Banking in India, Anmol
Publications, New Delhi, 1992..
Bidani S.N., Managing Non-performing Assets in Banks,
Vision Books private Limited, New Delhi, 2002.
http://www.rbi.org.in
http://www.moneycontrol.com
http://rbi.org.in/scripts/NotificationUser.aspx
http://www.ibef.org/industry/Banking.aspx
http://www.bankingindiaupdate.com/general.html
http://www.moneycontrol.com/npa-strategies-followed.html
www.indianmba.com/Faculty_Column/FC56/fc56.html

THANK
YOU..