PAPER TITLE

COMPARATIVE ANALYSIS OF NON-PERFORMING ASSETS OF PUBLIC AND PRIVATE

SECTOR BANKS
Project Submitted to the Department of Commerce and Management,
St. Xavier’s University, Kolkata

In partial fulfilment for the Degree of Bachelors of Commerce

In Finance
By
PINGOL CHOUDHURY
(Registration No. XK01-1112-0578-18)

Under the supervision of Prof. Tanmayananda Chattaraj

Department of Commerce and Management
St. Xavier’s University, Kolkata
Action Area IIIB, P.S. – New Town, Kolkata – 700160
Website: www.sxuk.edu.in

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 ACKNOWLEDGEMNT
The success and final outcome of this project required a lot of guidance and assistance from
many people and I am extremely fortunate to have gotten this all along the completion of my
project work. Whatever I have done is only due to such guidance and attendance and I would
not forget to thank them.

I owe my profound gratitude to our Project Supervisor, Prof. Tanmayananda Chattaraj, who
took keen interest on our project and guided me all along, till the completion of our project
work by providing all necessary information and constant support.

I would like to thank St. Xavier’s University, Kolkata for having included this project work
into the curriculum. This project work instigated in me to learn many new things. Though I
have tried my best to complete this project and gain maximum as I could but there is still to
learn from it. I would also like thank all people who have directly and indirectly helped me in
this project.

I would finally like to thank my parents and friends, who helped me gather information and
data regarding the topic. However, I accept the sole responsibility for any error of omission
and would be extremely grateful to the readers of this project if they bring such mistakes to
my notice.

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 TABLE OF CONTENTS
SECTION SUBJECT PAGE NO.

I INTRODUCTION 5-19

1.Background of the Study 5-7

2.Conceptual Framework 7-18

3.Chapter Planning 18-19

II LITERATURE REVIEW 20-21

III OBJECTIVES OF THE 22

STUDY

IV RESEARCH 23
METHODOLOGY

V DATA ANALYSIS AND 24-39

FINDINGS

-Research Design 24-26

-Comparative Ratios 27-29

-Provision Ratios 29-30

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 -Comparison of Gross and 31
Net NPA Ratio of Public
Sector Bank
-Comparison of Gross and 32
Net NPA Ratio of Private
Sector Bank
-Composition of Loan 33-37
Assets of Bank

-Non-Performing Assets 38
Recovery Analysis

-Findings 39

VI CONCLUSIONS AND 40-41

RECOMMENDATIONS

-Summary 40

-Suggestions and 41
Recommendations

VII LIMITATIONS OF THE 42

STUDY

VII BIBLIOGRAPHY 43-44

-Journals and Websites 43-44

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 SECTION I
Introduction
1. Background of the Study
This report is prepared for fulfilling the course requirement of St. Xavier’s University,
Kolkata academic structure. As the classroom discussion alone, cannot give proper picture of
real business situation, it is an opportunity for the student know about real life situation
through this program. Project research is very essential for every student, especially for the
student of Commerce field, which helps them to know real existing situation. For this reason,
a student is directed to take project program at the last stage of the B.COM (H) degree. I have
made this project report on “COMPARATIVE ANALYSIS OF NON-PERFORMING
ASSETS OF PUBLIC AND PRIVATE SECTOR BANKS”. I wanted to work on this topic
because, as strong banking sector is important for flourishing economy so it is important to
know about the Non-Performing Assets of the banks.

A robust banking system is critical to a strong economy. The lending company is one of the
most critical and significant positions performed by the banking industry. It is usually
favoured because it helps in the diversion of funds from the system to beneficial uses, which
results in economic development. As for everything, there are advantages and disadvantages.
This is especially true for financing businesses that include collateral danger, which happens
when a creditor fails to meet its contractual commitments, either during the process of a loan
or on a potential commitment. The banking sector's collapse may have a negative effect on
other industries. Non-performing assets are a huge source of worry for Indian banks. NPA’s
are a barometer of a bank's success. A high degree of NPAs indicates a high risk of a
significant number of loan defaults, which adversely impact banks' performance and net
worth while also diminishing the asset's valuation. The rise of Non-Performing Assets
necessitates the need for provisions, which limits overall earnings and shareholder equity.
The topic of Non-Performing Assets has been extensively debated in the global financial
sector. NPAs are a challenge that affects not only banks, but the whole economy. Indeed, the
high level of non-performing assets in Indian banks is a measure of the industry's and trade's
wellbeing. This project focuses on comprehending the idea of non-performing assets (NPAs),
their extent and the primary reasons for an account being non-performing, forecasting NPAs
in banks throughout the next several years, and concluding remarks.

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The amount of Non-Performing Assets has a significant effect on a bank's profitability. They
are legally prohibited from recording profits on such accounts, although banks are required to
make provisions for such assets in accordance with RBI guidelines. The RBI has urged all
State Co-operative Banks and Central Co-operative Banks in the country to implement
prudential standards beginning with the fiscal year ending 31 March 1997. Since 1997, they
have been revised many times. Their guidelines define Non-Performing Assets (NPAs), as
well as the standards for asset classification and provisioning. It is now widely accepted that
banks and financial institutions in India face an escalating problem of non-performing assets
(NPAs), which is becoming increasingly unmanageable. Numerous measures have been taken
to get the crisis under management. Of all other measures, the most significant was
Parliament's passage of the Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002, which was a critical move toward the removal or
reduction of Non-Performing Assets.

A loan is categorised as a non-performing asset (NPA) if the applicant fails to pay dues in the
form of principal and interest over a term of 180 days; moreover, beginning in March 2004, a
borrower would be classified as in default if dues are not charged for 90 days. If a bank's
advance or credit facility to a borrower becomes non-performing, the bank is required to
accept all advances/credit facilities issued to that borrower as non-performing, regardless of
whether those advances/credit facilities remain in performing condition. Our banks' non-
performing assets (NPAs) are far higher than international expectations. One cannot neglect
the reality that a portion of the decline in NPAs is attributed to banks' bad loan write-offs.
Indian banks should exercise caution in granting loans to creditworthy customers. In this
case, the adage "prevention is often preferable to cure" serves as a cardinal guideline for
reducing NPAs.

Indian Banking Sector

The Indian banking dates all the way back to the Vedic time. The change from money
lending to banking is assumed to have happened well before Manu, the great Hindu jurist
who devoted an entire section of his work to deposits and advances and established laws
governing interest rates. Indigenous bankers played a critical role in lending capital and
funding international exchange and commerce during the Mogul era. During the days of the
East India Company, the banking sector was handled by the agency houses. In 1786, the
General Bank of India became the country's first joint stock bank. The Bank of Hindustan
and the Bengal Bank followed. According to reports, the Bank of Hindustan survived until

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1906, when the other two crashed. The East India Company founded three banks in the first
half of the nineteenth century: The Bank of Bengal in 1809, the Bank of Bombay in 1840,
and the Bank of Madras in 1843. These three institutions, also known as Presidency Banks,
operated as self-contained units and performed admirably. These three banks merged in 1920,
and on 27th January 1921, a new bank, the Imperial Bank of India, was founded. With the
passage of the State Bank of India Act in 1955, the Imperial Bank of India's operations were
transferred to the newly formed State Bank of India. The Reserve Bank, also known as the
Central Bank, was founded in 1935 with the passage of the Reserve Bank of India Act 1934.
Following the Swadeshi Movement, the country founded a range of banks with Indian
management, including Punjab National Bank Ltd, Bank of India Ltd, Canara Bank Ltd,
Indian Bank Ltd, Bank of Baroda Ltd, and the Central Bank of India Ltd. On July 19, 1969,
the government nationalised 14 of the country's largest banks, and on 15th April 1980, the
government also took over six additional commercial private sector banks.

2. Conceptual Framework
a. Concept

Banking Operations and Activities

Banking on a retail level, working directly with consumers and small companies.

Company finance, specialising in the provision of services to mid-market enterprises.

• Corporate banking is geared toward big businesses.

• Private banking, which provides money management services to people with a large
net worth.
• Investment banking is a term that refers to investment exchange operations such as
"underwriting" (guaranteeing the selling of) equity and bond securities, trading on
their own portfolios, making markets, and advising companies on capital market
transactions such as mergers and acquisitions.
• Merchant banking is an investment bank's private equity division.
• Financial services refer to multinational financial companies that conduct a variety of
financial operations, including banking and insurance.

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Banks in the Public Sector

PSBs are banks of which the government owns a controlling interest (i.e., more than 50%).
These banks' securities are traded on stock exchanges. In India, there are a total of 27 PSBs
[21 nationalised banks + 6 state-owned banks (SBI + 5 associates)]. IDBI Bank and Bharatiya
Mahila Bank were nationalised in 2011 and 2014, respectively, with a minimum capital
requirement of Rs 500 crore. The establishment of public sector banks With the
nationalisation of the Imperial Bank of India in 1955, the Central Government joined the
banking market. The Reserve Bank of India acquired a 60% interest in the new bank, which
was called the State Bank of India. When the seven other state banks were nationalised on 19
July 1960, they became branches of the new bank. The next significant bank nationalisation
occurred in 1969, when the Indian government, led by Prime Minister Indira Gandhi,
nationalised an additional 14 major banks. Deposits in the nationalised banks totaled 50
crores in 1969. This move expanded the involvement of nationalised banks in India, with the
government taking charge of 84 percent of total branches.

There are 27 public sector banks in total, including IDBI and BMB. Some Public Sector
Banks are included, like nationalised banks and SBI and its associates.

There are several Nationalised Banks such as Bank of India, Indian Bank, Syndicate Bank,
UCO Bank, Dena Bank, Corporation Bank etc. Serveral SBI associates’ banks are also there
like State Bank of Travancore, State Bank of Hyderbad etc. but all this has been merged in
SBI.

Banks in the Private Sector

In India, private-sector banks comprise a subset of the banking sector, which is composed of
both private and public sector banks. The term "private-sector banks" refers to banks of
which a larger proportion of the state or equity is owned by private lenders rather than by the
government. After 1969, when the Indian government nationalised all major banks, banking
in India has been regulated by public sector banks. However, after the 1990s, when the
government's banking strategy was liberalised, both old and new private sector banks have
resurfaced. They have expanded faster and larger in the two decades after liberalisation by
using cutting-edge technologies and offering cutting-edge financial instruments and
techniques. Financial regulators in India classify private sector banks into two categories: old
and modern. Prior to 1969, the old private sector banks remained and retained their freedom
because they were either too weak or too specialised to be involved in nationalisation. The

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current private sector banks are those who have obtained a banking licence following the
1990s banking liberalisation.

The banks that were not nationalised during the period between 1969 and 1980 are referred to
as the old private-sector banks. Due to their limited scale and geographic orientation, these
were not nationalised. Since the majority of historic private-sector banks are tightly owned by
specific families, their activities are mostly confined to the regions in and near their origins.
These banks are the Old Private Sector Banks.

The banks that began operations after 1991 as a result of economic and financial market
changes are referred to as "modern private-sector banks." In 1993, the Banking Control Act
was revised to provide for the admission of new private sector banks into the Indian banking
sector. However, some conditions were established for the establishment of the new private-
sector banks, including the following: The bank's net worth should be at least Rs. 200 crores,
which can be increased to Rs. 300 crores. These banks are the New Private Sector Banks.

Some of the Private Sector banks are Kotak Mahindra, HDFC, Axis, RBL, IndusInd,
Bandhan, YES, Federal etc.

Types of Non-Performing Assets

There are two types of NPA’s which are:

1. Gross Non-Performing Assets

2. Net Non-Performing Assets

Gross Non-Performing Assets: Gross NPAs are the number of all loan reserves listed as
Non-Performing Assets (NPAs) by the RBI as of the balance sheet date. Gross Non-
Performing Assets (NPA) represents the quality of bank loans. It includes all non-standard
properties such as sub-standard, questionable, and failure assets.

It is calculable using the following ratio:

Gross NPA Ratio = Gross NPAs

Gross Advances

Net Non-Performing Assets: Net NPAs are NPAs from which the bank has excluded
allowance for NPAs. The net Non-Performing Assets (NPA) ratio illustrates the banks' true

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responsibility. Due to the fact that bank balance sheets in India include a large number of
NPAs and the method of loan recovery and write-off is extremely time consuming, the
provisions that banks are required to make against NPAs under central bank guidelines are
very important. This is why the gap of net and gross non-performing assets is very wide.

It can be determined using the following formula:

Net NPAs = Gross NPAs – Provisions

Gross Advances – Provisions

Why Assets does become Non-Performing Assets?

Numerous reasons contribute to the perpetual increase in the scale of NPAs in PSBs. In
comparison to foreign standards, the Indian banking sector has one of the largest percentages
of non-performing assets.

Several notable factors for investments being Non-Performing Assets include the following:

• Inadequate oversight and follow-up.

• Absence of a genuine business society.
• Inadequate statutory protections for mortgage and bankruptcy.
• Economic policies/environmental changes.
• Accounting policies that are opaque and ineffective auditing procedures.
• Inadequate communication among banks/FIs.
• Landings directed to specific markets.
• Failure of the promoters to raise their portion of equity from their own outlets or
through a stock offering owing to business conditions being unfavourable.

Reasons of Non-Performing Assets

There are several reasons which relate to both external and internal reported by the RBI. So
here are some factors:

Internal Factors

• Funding for expansion/diversification/modernization, Assisting/promoting associate

interests time/cost overruns throughout the project execution period
• Business could not happen

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 • Inefficiency of administration
• Lax credit management and supervision
• Technology/technical issue which became inappropriate
• Coordination among leaders lacked

External Factors

• Recession
• Input/power storage
• Price inflation
• Exchange rate fluctuation
• Accidents and natural calamities, etc.
• Changes in government policy on excise/import taxes, emissions control directives,
and so on.

Challenges

Impact of Non-Performing Assets

• Management Involvement
Time and resources expended by management was another indirect expense incurred
by the bank as a result of NPA. Management's time and money may have been better
used on more profitable operations. Today's banks employ specialised personnel to
work with and manage non-performing assets, which adds to the bank's costs.\

• Profitableness
NPA refers to the booking of money in terms of a bad commodity that happened as a
result of the client's poor decision. Due to the capital being blocked, the bank's
prodigality falls not only by the sum of NPA, but also by the opportunity cost
associated with that portion of capital spent in a return-generating project/asset. Thus,
NPAs impact not just existing profits but also possible streams of profits, potentially
resulting in the lack of certain long-term profitable opportunities. Another
consequence of decreased profitability is a poor ROI (return on investment), which
has a detrimental effect on the bank's existing earnings.

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 • Credit Risk
If a bank has a dispute with non-performing loans, which has a negative effect on the
bank's retail credit rating. It would lose its goodwill, market name, and credit, both of
which will have a detrimental effect on the people who deposit money in banks.

• Affluence
Income becomes blocked, reduced earnings results in a loss of cash on hand, which
forces the corporation to borrow money within the shortest possible amount of time,
incurring extra costs. Difficulty in running the bank's operations is another reason for
non-performing assets (NPAs) owing to a shortage of funds. Payments and dues on a
regular basis.

Early Symptoms

How does one tell when a producing asset becomes a non-performing asset?

There are four distinct types of early symptoms:-

Economic

• In the case of a term loan, non-payment of the initial instalment.

• Cheque bounces due to inadequate funds in the banks.
• Inconsistency in instalment.
• Inconsistency in accounting transactions.
• Unpaid past-due expenses.
• Current Ratio is decreasing.
• Payment that is insufficient to pay the interest and principal on the instalment.
• When auditing the books, it is discovered that a portion of the funds has been
transferred to a sister concern or parent corporation.

Physical and operational

• If notification is collected that the creditor has either begun the procedure of winding
up the company or has ceased operations.
• Account’s receivables that are past due.
• Stock statement was not submitted in a timely manner.

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 • External uncontrollable factors such as natural disasters in the city where the creditor
does company.
• Default in the allocation of salaries.

Attitude Modifications

• Borrower's use of funds for personal comfort securities, and shares

• avoidance of communication with the bank
• conflict between spouses.

Others

• Changes in government policy

• Borrower's death
• Consumer competition.

General Rules of Non-Performing Assets for Banks

In line with international practises and in response to the basis of the report on national
economy (Chairman Shri M. Narasimham), the Reserve Bank of India has phased in
prudential standards for income recognition, asset classification, and provisioning for banks'
advances portfolios in order to achieve greater consistency and transparency in the published
financial statements. Income identification strategy ought to be objective and focused on a
track record of recovery, not on arbitrary factors. Similarly, banks' reserves must be classified
using quantitative metrics to guarantee the standards are applied consistently and uniformly.
Additionally, provisioning can be rendered on the grounds of asset classification, namely the
duration of the asset's non-performance / overdue status, as well as the security's availability
and realisable worth.

Advances as Non-Performing Assets

• Consideration of various services available to the creditor as past due (NPA)

SCBs / CCBs make short-term agricultural advancements to CCBs PACS for the
benefit of on-lending. Regarding those advancements, as well as advances for other
reasons, if any, made under the on-lending scheme, only the facility that became
unusual could be considered as a non-performing asset, not all of the other facilities
extended to them. Crop loans for each season, namely Rabi and Kharif, must be

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 handled separately and in accordance with IRAC standards. All other direct loans and
advances made to a creditor would become non-performing except though one loan
A/c becomes non-performing.
• Advancement treatment for agriculturally related operations as well as the non-
farm industry
Credit facilities provided for other allied farming operations as well as non-farm
business activities may be classified as non-performing assets (NPAs) if principal
and/or interest instalments stay unpaid for a term of two quarters after the due date.
• Progress of the consortium
In the case of consortium progresses, each bank is expected to identify the borrowable
accounts in accordance with its own recovery, i.e., the individual member banks'
recovery records. Banks involved in the project could then plan for their portion of the
recovery to be shifted from the consortium's lead fund.
• Agricultural advancements are handled
Banks can use the farming season as the basis for advances issued for agricultural
purposes whereby interest is paid on a half-yearly basis to coincide with harvest. In
other terms, if interest is not charged on an advance within the last two harvest
seasons (covering two half-years) until the principal was past due, the advance should
be considered as non-performing. This standard applies to all agricultural
advancements mentioned in the Annexure. In the case of agricultural advances not
defined in the Annexure, NPA will be determined in the same way as non-agricultural
advances, which are already subject to the 180-day delinquency standard. Crop
mortgages for each season, namely Rabi and Kharif, must be handled separately and
in accordance with IRAC standards.
• 'Status of non-compliance'
In the case of a cash credit / over draught facility, an account may be considered "out
of order" if the remaining balance exceeds the sanctioned cap / drawing power on a
continuous basis. When the remaining balance in the principal operating account is
below the sanctioned cap / drawing power but there have been no credits for six
months as of the balance sheet date or the credits are insufficient to offset the interest
debited over the same time, these accounts may be considered as "out of order."

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 • Account performance as of the balance sheet date
For the purpose of calculating NPA, only the account's results as of the balance sheet
date must be considered. Subsequent innovations need not be taken into account when
calculating NPAs. 2.10. Where interest and/or principal payments have stayed
outstanding for some two quarters out of the four quarters ended 31 March of the year
in question, the credit agreement may be considered as non-performing, even if the
default does not last for two consecutive quarters.

Scenario of the Nation

Management Practices of NPA in India

• The Credit Information Bureau (India) Limited is established (CIBIL)

• Publication of the Wilful Defaulter's List. Additionally, the RBI publishes a list of
creditors with aggregate debts of Rs.1 crore or more to whom lenders have filed suit
to recover their funds.
• Reporting Fraudulent activities to the RBI
• The formulation of the Ethical Conduct Framework with respect to the lender's
liability that banks must obey, thus preventing accounts from being NPAs as a result
of the bank's own default. This is the guideline of borrowers’ responsibility.
• Assessment and control of risks
• The RBI has urged banks to investigate all instances of wilful failure of Rs.1 crore or
more and to file claims in such instances. The Board of Directors is expected to
conduct a summary of all NPA accounts worth more than Rs.1 crore, with a particular
emphasis on establishing personnel responsibility.
• Reporting instances of rapid death
• Accounts deserving of special mention for their proactive detection of bad debts. This
segment includes loans and advances that are past due by fewer than one and two
thirds. These accounts, on the other hand, do not need provisioning.

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Measures Initiated by the RBI and the Government of India to Reduce
Non-Performing Assets

• Consolidation and Recovery

Banks are able to develop and enforce their own plans for resolving non-performing
assets (NPAs). Income and principal payments are rescheduled in light of the debt
service coverage ratio, the promoter's contribution, and the provision of security.
• Lok Adalat
Institutions assist banks in resolving conflicts concerning accounts classified as
"doubtful" or "loss," with an unpaid balance of more than Rs.5 lakh for resolution by
LokAdalats. Debt Recovery Tribunals have been authorised to convene LokAdalats to
hear cases including non-performing assets (NPAs) of Rs.10 lakhs and above. As of
September 30, 2001, the public sector banks had recovered Rs.40.38 crore via the
LokAdalat forum. This channel is expected to accelerate growth in the coming years,
especially in light of recent initiatives by several public sector banks and DRTs in
Mumbai. Several of the features include the following: Small NPAs up to Rs.20 lakhs
Rapid Recovery Veil of Authority Soft Defaulters Less costly Easier resolution
• Debt Recovery Tribunals
The Recovery of Debts Owed to Banks and Financial Institutions (Amendment) Act,
enacted in March 2000, aided in the enhancement of DRTs' operations. Provisions for
the appointment of several Recovery Officers, the authority to attach defendant's
property/assets prior to judgement, penalties for disobedience of the Tribunal's order
or breach of either of its terms, and the appointment of a receiver with powers of
realisation, management, security, and preservation of property are expected to
provide the DRTs the necessary teeth and expedite the recovery process. Though the
country has 22 DRTs with Appellate Tribunals based in five major cities, namely
Allahabad, Mumbai, Delhi, Calcutta, and Chennai, they have decided just 9814 cases
totaling Rs.6264.71 crore involving public sector banks since the inception of the
DRT system and up to September 30, 2001. The total sum retrieved in these situations
was just Rs.1864.30 crore. I could add that at periodic intervals, NIBM has provided
familiarisation programmes to assist presiding officers of DRTs in comprehending the
nuances of paperwork and organisational features, as well as other legalities related to
the Indian banking system. On its part, the RBI has recommended to the Government
that it propose enacting effective punitive measures against borrowers in possession

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 of attached property who block DRT receivers, as well as notifying defaulting
borrowers to honour the decrees entered against them.
• Asset Reconstruction Company
A trust with an authorised capital of Rs.2000 crore and an initial paid-up capital of
Rs.1400 crore is to be formed for the purpose of performing asset reconstruction
activities. It will enter into negotiations with banks and financial companies in order
to acquire distressed assets and build markets for them. India's government proposes
to implement regulatory amendments to promote the operation of the ARC
mechanism.
• Legal Reforms
In his latest budget address, the Honourable Finance Minister proposed a plan for
detailed regulations on asset foreclosure and securitization. Since June 2002, when it
was adopted as an Ordinance and subsequently approved by Parliament as an Act in
December 2002.
• Restructuring Corporate Debt (CDR)
In 2001, the Corporate Debt Management scheme was institutionalised to include a
prompt and open process for restructuring corporate debts of Rs.20 crore and above
with banks and financial institutions. Additionally, the CDR mechanism will allow
viable business companies to restructure their debts outside of the current legal
system, thus reducing the occurrence of new non-performing loans. The CDR system
is headquartered at IDBI in Mumbai, and a Standing Forum and Core Group have
already been formed to oversee the mechanism's administration. However, despite the
fact that more than six months have passed since its inception, the experiment has not
taken off at the desired pace. As stated by the Honourable Finance Minister in the
Union Budget 2002-03, the RBI formed a high-level group chaired by Shri.
VepaKamesam, Deputy Governor, to study and improve the CDR mechanism's
implementation procedures. The Group will conduct a study of the CDR Scheme's
execution, recognise any technical problems that will arise in the scheme's smooth
implementation, and recommend steps to improve the scheme's performance.
• Credit Information Bureau
The recently created Credit Information Bureau of India Ltd. (CIBIL) is in the process
of institutionalising information exchange agreements. The RBI is examining the
proposals of the S.R.Iyer Group (chaired by CIBIL's chairman) to operationalize the

17
 scheme for disseminating knowledge on financial system defaults. The Group's
primary guidelines require the release of facts about suit-filed accounts regardless of
the value reported in the suit or the amount of credit extended by a credit agency, as
well as irregular accounts where the creditor has consented to disclosure. This, I hope,
would deter those who take advantage of a lack of knowledge sharing among lending
institutions to loan large sums against the same assets and property, which has
contributed significantly to banks' incremental non-performing assets.
• Corporate Governance
The Reserve Bank established a Consultative Group chaired by Dr. A.S. Ganguly to
review the supervisory role of banks and financial institutions, to solicit feedback on
the Boards' performance in terms of compliance, transparency, disclosures, and audit
committees, and to make recommendations for improving the Boards' effectiveness
with a view to minimising risks. The Group is nearing completion of its
recommendations and will issue guidance for efficient monitoring and oversight of
credit management and NPA preventive initiatives by bank boards of directors.
3. Chapter Planning

The following shows the study's structure:

Section I

Introduction-It is divided into six distinct parts, as specified below. Each segment covers a
variety of topics, as detailed below-

1. Background of the Study: This segment discusses the basic concept of banking in
India and the Non-Performing Assets of various banking sectors.
2. Conceptual Framework: It is divided into three distinct parts, as shown below. Each
segment covers a variety of topics, as detailed below.
a. Definition: This section discusses the project's concept.
b. Challenges: This section discusses the positives and drawbacks of the initiative.
c. National Scenario: This section discusses the national landscape in rural and urban
marketing. It discusses the current state of the industry and the developments that
have occurred over time, as well as potential prospects and perspectives in the field of
Rural & Urban Marketing.

3. Chapter Planning: Provides a concise summary of the whole project paper.

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Section II

Literature Review: This portion summarises the findings and recommendations of previous
research undertaken by many other researchers on the subject of this project study.

Section III

Objectives: This segment discusses the goals of this initiative. It includes the objectives for
the project's accomplishments.

Section IV

Research Methodology: This segment summarises the statistics that will be included in the
project report and the sources from which the data will be gathered.

Section V

Analysis and Findings: This section discusses the research design, methodology, sample
profile, data type, data source, study duration, and tools used.

Section VI

Conclusion and Recommendations: This portion contains concluding statements and

recommendations focused on the major conclusions and feedback. The key observations
made during this project have been incorporated into the research to allow concrete
inferences to be drawn. Recommendations have been gathered that may prove beneficial in
resolving the project's found shortcomings.

Section VII

Limitations of the Study: The limitations that would be encountered are identified here to
ensure that we have an accurate understanding of the data gathered and the predictions,
explanations, and assumptions drawn using the data.

Section VIII

Bibliography: This section will include the list of books and articles which have been used
in the project work. A bibliography contains all sources that the researcher has used, whether
they are directly cited or not. A bibliography includes sources used to generate ideas around
the research project.

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 SECTION II
Literature Review
NPA is a major concern in the banking sector, and several scholars have attempted to
investigate the causes of NPA, the issues caused by NPA, and the effect of NPA on the
banking sector, as well as propose solutions or remedies to the growing issue of NPA.
Numerous articles have been published and reviewed, and this section of the paper would aim
to summarise many of them in the same field of non-performing assets held by public sector
banks, private sector banks, and other banks. This survey examined previously published
documents, essays, journals, and studies generated by various writers, associations, and
committees.

I. Rajaraman and G. Vasishtha (2001): The paper employs panel regression to analyse
NPA usable over a five-year duration culminating in 1999-2000. The article examines 27
public sector banks and the differences within a class that is otherwise homogeneous in terms
of ownership and operating quality.

P.K. Reddy (2002): This article discusses the perspectives of other Asian countries in
dealing with non-performing assets. It also examines the impact of the changes on the level of
NPAs and makes recommendations for resolving the issue based on international experience.

I. Satpathy and B.C.M. Patnaik (2010): The aim of this paper was to investigate the
triggers of non-performing assets (NPAs) in commercial bank home loans. For this reason,
loan borrowers were surveyed using specially designed questionnaires, and eventually,
recommendations for resolving the issue were made.

B. Gupta (2012): This paper examines SBI and Associates, as well as public sector banks,
with the goal of comprehending the idea of non-performing assets (NPAs), their size, and the
major factors contributing to their development, as well as evaluating the organisational
success in managing NPAs.

S. D. Kamra (2013): This article examines the non-performing assets (NPAs) of three
nationalised banks: State Bank of India (SBI), Punjab National Bank (PNB), and Central
Bank of India (CBI). Additionally, it discusses the policies used by banks to handle non-
performing assets (NPAs) and proposes a plan for the rapid recovery of NPAs.

20
K.T. Srinivas (2013): The aim of this paper is to examine the factors that contribute to loans
and advances being non-performing assets in the Indian commercial banking sector and to
propose a solution to the aforementioned issue.

A. Dutta (2014): This article examined the rise of non-performing assets in India's public and
private sector banks, as well as the non-performing assets of commercial banks by sector. The
analysis gathered data from secondary sources such as the RBI's report on the Trend and
Progress in Banking in India, the RBI's Report on Currency and Finance, and the RBI's
Economic Surveys of India.

L. K. Tripathi, A. Parashar, and S. Mishra (2014): The current research, using a multiple
regression model, examines the effect on banks' gross non-performing assets of priority
sector advances, unsecured advances, and advances to vulnerable sectors made by banks such
as the SBI group and other nationalised banks.

N. Arora and N. Ostwal (2014): The current article analyses and compares the loan
portfolios of public and private sector banks. The report concluded that non-performing
assets continue to pose a danger to banks and financial firms, with public sector banks seeing
a higher rate of non-performing assets than private sector banks.

The Literature's Research and Time Gap

Although various facets of the literature on Non-Performing Assets have been compiled and
used for this analysis throughout the years, there is a significant time lag for detailed studies
on the consistency aspects of Non-Performing Assets. The majority of experiments and
studies focus on the triggers, effects, and management of NPAs. My research focuses on the
effects of Non-Performing Assets (NPAs) in public and private sector banks.

21
 SECTION III

Objectives of the Study

• To compare the performance of public sector and private sector banks in handling
non-performing assets using comparative ratios.
• To do an analysis of the different compositions of non-performing assets held by
public and private sector banks.
• To conduct research into the effect of non-performing assets on the performance of
public and private sector banks.
• To investigate the different avenues for the recovery of non-performing assets.

22
 SECTION IV
Research Methodology
The research methodology is a tool for analysing the research issue in a comprehensive
manner. The term "analysis approach" refers to the process by which we can accomplish our
assigned mission. I followed the protocol outlined below while conducting my report review.

• Research Problem – While I am involved in finance, I have chosen to focus my

research on the banking sector (NPAs). Credit provision to the consumer is a critical
consideration in the banking industry. I was assigned the project "Comparative
Analysis of Public and Private Sector Non-Performing Assets."
• Research Design - Descriptive Analysis can be used as the research design. Visual
aids such as diagrams and maps are often used to assist the reader.
• Identifying the origins of the data – Main or secondary data sources are appropriate.
I relied almost entirely on secondary data for my research. Secondary data is data that
has already been developed and is ready to be used.
• Tools Used - The data obtained were analysed using mathematical tools such as ratio
and trend analysis.

23
 SECTION V
Data Analysis and Findings
Research Design

1. Basic

The project design serves as a structure or model for carrying out the research procedures
necessary to elicit the knowledge necessary to solve problems. The aim of research is to assist
decision makers in assessing, analysing, and selecting the best course of action to pursue in
specific circumstances. Descriptive experiments are often the most effective tool for
collecting data that demonstrates interactions and accurately describes the environment.
Descriptive experiments are mainly concerned with describing what occurs or what exists.
The research design that will be use is Descriptive Research.

❖ It is involved in gathering the data which describes the events and then helps in
organizing, tabulating, depicting, and describing the data.
❖ The organized data which are turned into patterns which emerges during the analysis
are gathered using description as a tool.
❖ Graphs and charts are often used as visual aids to aid the reader for more
simplification.

2. Source of Data
There are two types of data available: primary data and secondary data.
We would use secondary data to analyse and assess Non-Performing Assets in public and
private sector banks in this report.
Secondary data is data that has already been developed and is ready to be used. The data on
NPAs and their structure, description of loan reserves, earnings and advances of various
banks is derived from the Reserve Bank of India's official website and a few other banking
websites. We must extract all Public Sector Banks and all Private Sector Banks from the
RBI's approved published data for this research report.

24
 3. Period of Study
In this research we have used financial data of 5 years from 2012-16.

4. Data Analysis

The collected data were compiled, analysed, and assessed using scientific calculations. The
data where processed and analysed manually and with the help of a robot. We used the
tabular approach, ratio analysis, and correlation analysis methods. Numerous ratios were
determined in an Excel database for this search, and correlation analysis was performed using
the SPSS statistical analysis method.

5. Research Methodology
The research methodology is a tool for analysing the research issue in a comprehensive
manner. The term "analysis approach" refers to the process by which we can accomplish our
assigned mission. I followed the protocol outlined below while conducting my report review.

• Research Problem – While I am involved in finance, I have chosen to focus my

research on the banking sector (NPAs). Credit provision to the consumer is a critical
consideration in the banking industry. I was assigned the project "Comparative
Analysis of Public and Private Sector Non-Performing Assets."
• Research Design - Descriptive Analysis can be used as the research design. Visual
aids such as diagrams and maps are often used to assist the reader.
• Identifying the origins of the data – Main or secondary data sources are appropriate.
I relied almost entirely on secondary data for my research. Secondary data is data that
has already been developed and is ready to be used.
• Tools Used - The data obtained were analysed using mathematical tools such as ratio
and trend analysis.

25
 6. Analysis on Secondary Data
To begin analysing data, we must first gain an understanding of what data processing and
interpretation are. Analysis and interpretation of processes of purpose and context based on
qualitative study results, and application of the resulting information to client issues. This
data is often collected by conversation logs and community interviews, but is not restricted to
these methods.

Through eradicating and immersing themselves in the results, as well as by engaging in

dynamic structuring tasks, framing, and experimenting, researchers seek out themes and ideas
related to the primary study questions and use them to address client short problems.

This chapter includes some comparative study in order to accomplish research objectives.
This is accomplished through numerous ratio analyses and correlations between net income
and non-performing assets (NPAs).

26
COMPARATIVE RATIOS

Net NPA’s Ratio (%)

Net NPA Ratio (%) = Net NPA’s * 100

Net Advances

Net NPA’s to Advances Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 1.69 0.51

2013 2.01 0.53

2014 2.55 0.66
2015 2.91 0.89
2016 5.72 1.37

Net NPA Ratio

7
6
5.72
5
4
3 2.91
2.55
2 2.01
1.69
1.37
1 0.89
0.51 0.53 0.66
0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

Interpretation

• The bank is in more dangerous position when the Net NPA Ratio is higher. So, here in
the analysis it indicates the Net NPA Ratio of Public Sector Banks and Private Sector
Banks from 2012 till 2016.

27
 • From the graph above, we can see that the rate of growth of Net NPA for public and
private sector banks has risen from 1.69 percent to 5.72 percent and 0.51 percent to
1.37 percent, respectively, from 2012 to 2016.
• However, the increase in the Net NPA Ratio of Public Sector Banks, which has
increased by 4.03 percent from 2012 to 2016, is very concerning, as it has only
increased by 0.86 percent in Private Sector Banks.

Gross NPA’s Ratio (%)

Gross NPA Ratio (%) = Gross NPA’s * 100

Gross Advances

Gross NPA’s to Advances Ratio(%)

Year Public Sector Bank Private Sector Bank

2012 3.17 2.09

2013 3.61 1.77

2014 4.36 1.78
2015 4.96 2.10
2016 9.28 2.83

Gross NPA Ratio

10
9.28
8

6
4.96
4 4.36
3.61
3.17 2.83
2 2.09 1.77 1.78 2.1

0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

28
Interpretation

• When the Net NPA Ratio is higher, the bank is in a riskier situation. So, from 2012 to
2016, the report shows the Net NPA Ratio of Public Sector Banks and Private Sector
Banks.
• From the graph above, we can see that the rate of growth of gross Non-Performing
Assets (NPA) in Public Sector Banks has increased from 3.17 percent to 9.28 percent
between 2012 and 2016, while in private sector banks, it first decreased in 2013, from
2.09 percent to 1.77 percent, and then began to increase, reaching 2.83 percent in
2016.
• However, we can conclude that the growth in the Gross NPA ratio of Public Sector
Banks is very concerning, as it has risen from 3.17 percent to 9.28 percent, while it
has only risen from 2.09 percent to 2.83 percent in Private Sector Banks from 2012 to
2016.

PROVISION RATIO (%)

Provision Ratio (%) = Provisions * 100

Gross NPA’S

Provisons ro Gross NPA’s Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 47.37 75.83

2013 45.31 70.59

2014 42.64 63.36
2015 42.56 58.06
2016 40.67 52.24

29
 Provisions Ratio
80
75.83
70 70.59
60 63.36
58.06
50 52.24
47.37 45.31
40 42.64 42.56 40.67
30
20
10
0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

Interpretation

• From 2012 to 2016, this report shows the Provision Ratio of Public Sector Banks and
Private Sector Banks. As we all know, the higher this ratio is, the safer the bank's
situation is.
• We can see from the graph above that, as the rate of Gross Nonperforming Assets
(NPAs) rises, provisions made by public and private sector banks fall, from 47.37
percent to 40.67 percent and 75.83 percent to 52.24 percent, respectively, from 2012
to 2016.
• We may claim that even though provisions are declining and private sector banks
have less nonperforming assets (NPAs) than public sector banks, they are also making
more provisions to be healthy.

30
 COMPARISON OF GROSS AND NET NPA RATIO OF PUBLIC SECTOR
BANK

Public Sector Banks

Year Gross NPA Ratio (%) Net NPA Ratio (%)

2012 3.17 1.69

2013 3.61 2.01

2014 4.36 2.55
2015 4.96 2.91
2016 9.28 5.72

Comparison of Gross NPA and Net NPA Ratios of Public

Sector Banks
10
9.28
8

6 5.72
4.96
4 4.36
3.17 3.61
2.55 2.91
2 1.69 2.01

0
2012 2013 2014 2015 2016

Gross NPA Net NPA

Interpretation

• The relationship between gross NPA ratio and net NPA ratio is seen in this study.
From 2012 to 2016, all of these indicators have risen in Public Sector Banks.
• The above graph indicates that gross Non-Performing Assets (NPA’s) are higher than
net Non-Performing Assets (NPA’s), implying that public sector banks make more
allowances to mitigate the chance of non-recovery.

31
 COMPARISON OF GROSS AND NET NPA RATIO OF PRIVATE
SECTOR BANK

Private Sector Banks

Year Gross NPA Ratio (%) Net NPA Ratio (%)

2012 2.09 0.51

2013 1.77 0.53

2014 1.78 0.66
2015 2.10 0.89
2016 2.83 1.37

Comparison of Gross NPA and Net NPA Ratios of Private

Sector Banks
3
2.83
2.5

2 2.09 2.1
1.77 1.78
1.5
1.37
1
0.89
0.66
0.5 0.51 0.53

0
2012 2013 2014 2015 2016

Gross NPA Ratio Net NPA Ratio

Interpretation

• The relationship between gross NPA ratio and net NPA ratio is seen in this study.
From 2012 to 2016, all of these indicators have risen in Public Sector Banks.
• The above graph indicates that gross Non-Performing assets (NPA’s) are higher than
net Non-Performing Assets (NPA’s), implying that public sector banks make more
allowances to mitigate the chance of non-recovery.

32
 COMPOSITION OF LOAN ASSETS OF BANKS

Standards Assets Ratio (%)

Standards Asset Ratio (%) = Total Standard Assets * 100

Gross NPA’S

Standard Assets Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 3.40 5.29

2013 2.67 5.59

2014 2.20 5.53
2015 1.92 4.67
2016 0.98 3.43

Standards Assets Ratio

6
5.59 5.53
5.29
5
4.67
4
3.4 3.43
3
2.67
2 2.2
1.92
1 0.98
0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector

Interpretation

• From 2012 to 2016, this report shows the Standard Asset Ratio of Public Sector
Banks and Private Sector Banks. As we all know, the higher this percentage is, the
better it is for the banks.

33
 • From the graph above, we can see that the Standard Asset Ratio of Public and Private
Sector Banks has been steadily declining from 2012 to 2016, falling to 3.43 percent
for Private Sector Banks from 5.29 percent and to 0.98 percent for Public Sector
Banks from 3.40 percent. As a result, we can conclude that the private sector bank is
in a better shape than the public sector bank.

Sub-Standards Assets Ratio (%)

Sub-Standards Asset Ratio (%) = Total Sub-Standard Assets * 100

Gross NPA’S

Sub-Standard Assets Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 0.06 0.26

2013 0.05 0.28

2014 0.04 0.27
2015 0.04 0.23
2016 0.04 0.17

Sub-Standards Assets Ratio

0.3
0.28 0.27
0.25 0.26
0.23
0.2
0.17
0.15
0.1
0.05 0.06 0.05 0.04 0.04 0.04
0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

34
Interpretation

• From 2012 to 2016, this report shows the Sub-Standard Asset Ratio of Public Sector
Banks and Private Sector Banks. As we all know, the smaller this percentage is, the
better it is for the banks.
• From the graph above, we can see that the Sub-Standard Asset Ratio of Public and
Private Sector Banks has been steadily declining from 2012 to 2016, falling to 0.17
percent for Private Sector Banks from 0.26 percent and to 0.04 percent for Public
Sector Banks from 0.06 percent. As a result, we can conclude that public sector banks
are in a better spot than private sector banks.

Doubtful Assets Ratio (%)

Doubtful Asset Ratio (%) = Total Doubtful Assets * 100

Gross NPA’S

Sub-Standard Assets Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 0.04 0.06

2013 0.05 0.05

2014 0.05 0.05
2015 0.06 0.05
2016 0.06 0.06

Doubtful Assets Ration

0.07
0.06 0.06 0.06 0.06
0.05 0.05 0.05 0.05
0.04 0.04
0.03
0.02
0.01
0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

35
Interpretation

• From 2012 to 2016, this report shows the Doubtful Asset Ratio of Public Sector
Banks and Private Sector Banks. We all know that the lower this level is, the better it
is for the banks.
• From 2012 to 2016, the Doubtful Asset Ratio of Public Sector Banks increased
marginally, while that of Private Sector Banks remained stable. Since the ratios for
both banks are marginally different, the only thing that distinguishes the banks is that
the public ratio is increasing while the private ratio remains stable. So, a merit from
this ratio is that the Private Sector gains from it.

Loss Assets Ration (%)

Loss Assets Ratio (%) = Total Loss Assets * 100

Gross NPA’S

Loss Assets Ratio (%)

Year Public Sector Bank Private Sector Bank

2012 0.005 0.02

2013 0.004 0.02

2014 0.004 0.02
2015 0.004 0.02
2016 0.003 0.01

36
 Loss Assets Ratio
0.025

0.02 0.02 0.02 0.02 0.02

0.015

0.01 0.01

0.005 0.005 0.004 0.004 0.004 0.003

0
2012 2013 2014 2015 2016

Public Sector Bank Private Sector Bank

Interpretation

• From 2012 to 2016, this report shows the Loss Asset Ratio of Public Sector Banks
and Private Sector Banks. As we all know, the smaller this percentage is, the better it
is for the banks.
• om the graph above, we can see that the Loss Asset Ratio of Public and Private Sector
Banks has been steadily declining from 2012 to 2016, falling to 0.01 percent for
Private Sector Banks from 0.02 percent and to 0.003 percent for Public Sector Banks
from 0.005 percent. As a result, we can conclude that the Private Sector Bank is in a
better situation than the Private Sector Bank.

37
 NPA RECOVERY ANALYSIS

Percentage of NPA Amount Received

Lok Adalats(%) DRTs(%) SARFAESI Act(%)

2012-13 6.1 14.2 27.2

2013-14 6 9.6 26.6

2014-15 3.2 7 16.3

2015-16 4.4 9.2 16.5

Recovery Rate
30

25

20

15

10

0
2012-13 2013-14 2014-15 2015-16

Lok Adalats DRTs SARFAESI Act

Interpretation

• During the study cycle of 2012 to 2016, the above chart clearly shows NPAs of
scheduled commercial banks recovered via different networks.
• The SARFAESI Act is the most successful way to restore NPAs. In 2015-16, this
channel was used to recover Rs 13,200 crores. However, it is in smaller proportions
than in 2012-13.

38
Findings

• Through time, the percentage change in gross NPA to gross advances and total NPA to
net advances ratios has risen steadily.
• It claims that private sector banks make more allowances for gross Non-Performing
Assets (NPAs) and gross advances than public sector banks.
• Both banks' Non-Performing Assets (NPAs) are declining.
• There is a favourable relationship between Non-Performing Assets (NPAs) and private
sector bank earnings, which is attributable to banks' poor customer selection.
• The Liquidity of Banks suffers as a result of this.
• Banks are unable to lend to new customers due to a shortage of funds caused by Non-
Performing Assets (NPAs).
• NPAs limit a bank's earning power and have a negative impact on its profitability.
• The standard assets of public sector banks have decreased over time, whilst the standard
assets of private sector banks have increased.
• Public banks' questionable reserves are rising, but private sector banks are staying the
same.
• Both banks' loss reserves are showing a downward trend.
• The National Company Law Tribunal (NCLT) has made decisions on company
insolvency. Individual insolvency settlement has been decided by the Debt Recovery
Tribunal (DRT).
• The growth of Non-Performing Assets (NPAs) in banks is largely due to ineffective
restructuring, wilful defaults, and a flawed lending mechanism.

39
 SECTION VI
Conclusions and Recommendations
Summary

NPAs are one of the most serious issues confronting Indian banks today. If careful control of
non-performing assets is not implemented, it would have a detrimental effect on the banks'
business. If the idea of non-performing assets is treated loosely, it would be detrimental to the
Indian banking industry.

The NPAs would obliterate existing profit; interest profits would be lost as a result of the
NPAs' vast provisions, and the recycling of funds would be disrupted.

Additionally, banks redistribute risks to other creditors by can interest rates. Reduced deposit
rates and increased loan rates suffocate deposits and capital markets, impeding economic
development.

While public sector banks have superior substandard reserves to private sector banks, private
sector banks are more competitive in all other areas, giving them a significant advantage.

Non-Performing Assets have long been a significant issue for Indian banks. It is not only a
challenge for the banks; it is also a problem for the country. Money held in non-performing
assets has a direct effect on a bank's profitability, as Indian banks depend heavily on interest
income on funds borrowed. This report demonstrates that the level of non-performing assets
is relatively large in public sector banks. Although the government has taken many measures
to reduce NPAs, such as S4A (Scheme for Sustainable Structuring of Stressed Assets) and the
Indradhanush Scheme, much more needs to be done to address this problem. Our banks
continue to have a large percentage of non-performing assets. It is impossible to have no
NPAs. The bank's management should expedite the phase of recovery. Recovery is a concern
for big borrowers, not small borrowers, and a stringent strategy should be pursued to resolve
this issue. Additionally, the government should increase arrangements for expedited
resolution of pending cases and reduce mandatory lending to priority sectors, since this is the
primary source of problems. Thus, resolving the NPA issue requires significant effort;
otherwise, NPAs would continue to erode bank profitability, which is detrimental to the
Indian economy's development.

40
Suggestions and Recommendations

•A new entity, such as a Debt Recovery Tribunal, should be created, and the capability of
existing DRTs should be increased.

•All banks should exercise strict control over advances produced during this time period.

•The public sector should place a greater emphasis on asset recovery.

•Private sector banks can diversify their revenue streams outside interest, since an uptick in
non-performing assets (NPAs) attributable to default on interest payments may have a
significant impact on earnings.

•The RBI's credit assessment and tracking programmes should be revised.

•Banks' loan recovery procedures should be enhanced and strengthened.

•Credit assessment and post–loan surveillance are critical measures that all banks must
prioritise.

•Regular follow-up with clients is essential, and it is the banker's responsibility to guarantee
that funds are not diverted. This procedure may be repeated on a daily basis.

•Personal visits should be made after loan approval and disbursement, and strict supervision
of the accounts of lent units should be conducted on a periodic basis.

•Bank advances need pre-sanctioning assessment and post-disbursement supervision in order

to reduce non-performing loans.

•Better management on the part of banks is needed to reduce the amount of non-performing
assets.

•Proper borrower selection and follow-up are expected to ensure prompt payment.

41
 SECTION VII
Limitations of Study

• Since my dissertation is focused on secondary results, I am unable to teach the about

the realistic operations of the banks associated with NPAs.
• Since my dissertation is focused on secondary results, I am unable to teach the banks
about the realistic operations associated with NPAs.
• NPAs evolve over time. The thesis is conducted in the present tense, with little regard
for possible changes.
• The analysis is focused on secondary data from numerous RBI publications and other
sources. These figures are derived from a historical accounting principle that
disregards the effect of inflation.
• The study's drawbacks include the fact that it is limited to a subset of selected and
restricted metrics and to a five-year timeframe.

42
 SECTION VIII
Bibliography
Journals

• Kanika Goyal, “Empirical Study of Non-Performing Assets Management of Indian

Public Sector Banks”, APJRBM Volume 1, Issue 1, October 2010.
• Prasad and Veena, “NPAs Reduction Strategies for Commercial Banks in India”.
International Journal of Management and Business Studies. Vol.1 Issue 3, pp. 49-53,
2011
• Price water house Coopers, “Management of nonperforming assets by Indian banks”,
IBA Bulletin, Jan. 2004.
• Chaudhary, K. & Sharma, M., “Performance of Indian Public Sector Banks and
Private Sector Banks: A Comparative Study”, International Journal of Innovation,
Management and Technology, Vol. 2, No. 3, 2011.

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44