Cooperative bank
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NPAs of co operative bank
Presented by Hardeep sharma Roll no. 120425717 MBA- 3rd semester
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Introduction:NPAs are loans made by a bank or a finance
company on which repayments or interest payments are not being made on time. This study focuses on the problem of NPA, its reasons, effects.
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PROFILE OF THE ORGANISATION
The Punjab State Cooperative Bank was established on 31st August, 1949 at Shimla vide registration No. 720 has a principle financing institution of the cooperative movement in Punjab.
In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State Cooperative Bank is extremely important as the whole credit system revolves around it.
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Organizational Structure
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Types of co-operative banksCo-operative banks
Rural co-op. banks
Short term co-
op. banks
Long term co-
op. banks
Urban co-op. banks
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Rural co-operative banks
Short term co-op. banks
State co-op.
banks
Central co-op.
banks
Primary
agricultur
e credit societ
ies
Long term co-op. banks
State co-op.
agriculture and rural
development banks
Primary co-op.
agriculture and rural
development banks
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OBJECTIVE S OF THE BANKTo protect the rural section from greedy money lendersTo provide easy credit facilities to the farmersTo promote and develop cooperative societies in the stateTo provide training and education facilities to farmersOverall development of rural areas
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Review of literatureBooks:MY Khan, Financial ServicesLM Bhole, Indian Financial System
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Objectives of studyTo understand what is NPA.To understand what are the reasons for the
emergence of the NPAs.To understand the dimensions of NPA.To study the position of NPA in co-op. bank.To study the tools used for management of
NPAs.To evaluate the ratio of the bank with
concerned to the NPAs.
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Research methodologyResearch design : Exploratory research
designSource of data: Secondary data : annual reports of the bank
Internet , financial books and agricultural book.
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Limitations of studyError is possible.Unable to get current data.
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Classifications of Assets
Assets
Performing asset or standard asset
Non-performing assets
Sub-standard assets
Doubtful
assets
Loss assets
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Non-performing assets NPA is a loan made by a bank or a finance
company on which repayments or interest payments are not being made on time.
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Types of NPAGross NPANet NPA
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Reasons of NPA Unwillingness of customers Ineffective recovery system Natural calamities Inflation Problems in agriculture sector Ineffective government policies Inappropriate technology Poor credit appraisal system Inefficient staff Willful default is not a criminal offence.
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Effects of NPA Reduces profitability.Reduces the image of the bank.Blockage of funds.Reduces chances of growth.
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Management of NPAsEarly recognition of the problem.Identifying borrowers with genuine intent.Settlement with customers.Lok adalats.
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Data analysis and interpretations
standard assets
sub-standard assets
Doubtful assets
loss assets0
10
20
30
40
50
60
70
80
90
100
98.69
0.60.62
0.0800000000000001
Year Wise NPA at Cooperative Bank for 2009-10
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standard assets
sub-standard assets
Doubtful assets
loss assets0
10
20
30
40
50
60
70
80
90
100
97.86
1.28 0.7 0.15
Year Wise NPA at Cooperative Bank for 2010-11
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stanadard assets
sub-standard assets
Doubtful assets
loss assets0
10
20
30
40
50
60
70
80
90
100
97.36
1.14 1.043 0.44
Year Wise NPA at Cooperative Bank for 2011-12
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2009-102010-11
2011-12
1.31
2.142.64
Gross NPA Ratio (%)
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2009-102010-11
2011-12
0.6
1.041.21
Net NPA Ratio (%)
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Year wise-Inflation Rate
Year• 2004• 2005• 2006• 2007• 2008• 2009• 2010• 2011• 2012• 2013
Inflation rate (%)
• 3.77• 4.25• 5.79• 6.39• 8.32• 10.83• 12.11• 8.87• 9.30• 11.04
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FindingsGross NPAs are increasing every year. This is not
good for bank.Net NPA is increasing every year.Standard assets are reducing every year.Substandard asset ratio firstly increases then
reduces.Doubtful asset ratio is increasing every year.Loss assets are increasing every year.The position of the bank is not good with respect
to its financial assets. Increase in inflation is a main reason behind NPAs.
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SuggestionsFinancial capacity of the borrower should be
evaluated.Settlement procedure should be more strict
and faster.Innovative technology should be adopted.Willful defaults should be made a criminal
offence.Proper training should be given to the staff.
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ConclusionFinancial performance of the banks is not
good due to the problem of NPAs. So this problem should be tackled as soon as possible. Otherwise our socio economic objectives cannot be achieved.
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THANK YOU