Comparative Analysis of NPA of Public Sector Banks,Private Sector Banks & Foreign Banks Project Report
RESEARCH METHODOLOGY
Introduction
The banking industry has undergone a sea change after the first phase of economic
liberalization in 1991 and hence credit management. While the primary function of banks is to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing loans etc., in recent times the banks have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). An NPA is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. As per the prudential norms suggested by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis. In other words, such interests can be booked only when it has been actually received.
Therefore, an NPA account not only reduces profitability of banks by provisioning in the profit and loss account, but their carrying cost is also increased which results in excess & avoidable management attention. Apart from this, a high level of NPA also puts strain on a banks net worth because banks are under pressure to maintain a desired level of Capital Adequacy and in the absence of comfortable profit level, banks eventually look towards their internal financial strength to fulfill the norms thereby slowly eroding the net worth.
Research Design
The research design that will be use is Descriptive Research.
=> Involves gathering data that describe events and then organizes, tabulates, depicts, and describes the data.
=> Uses description as a tool to organize data into patterns that emerge during analysis.
=> Often uses visual aids such as graphs and charts to aid the reader.
=> Using of hypothesis testing.
Download Full Project Report
RESEARCH METHODOLOGY
Introduction
The banking industry has undergone a sea change after the first phase of economic
liberalization in 1991 and hence credit management. While the primary function of banks is to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing loans etc., in recent times the banks have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). An NPA is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. As per the prudential norms suggested by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis. In other words, such interests can be booked only when it has been actually received.
Therefore, an NPA account not only reduces profitability of banks by provisioning in the profit and loss account, but their carrying cost is also increased which results in excess & avoidable management attention. Apart from this, a high level of NPA also puts strain on a banks net worth because banks are under pressure to maintain a desired level of Capital Adequacy and in the absence of comfortable profit level, banks eventually look towards their internal financial strength to fulfill the norms thereby slowly eroding the net worth.
Research Design
The research design that will be use is Descriptive Research.
=> Involves gathering data that describe events and then organizes, tabulates, depicts, and describes the data.
=> Uses description as a tool to organize data into patterns that emerge during analysis.
=> Often uses visual aids such as graphs and charts to aid the reader.
=> Using of hypothesis testing.
Download Full Project Report
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