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RESEARCH INSTRUMENT As a research instrument I have taken guidance from the CEO of City bank and also my faculty of college. DATA COLLECTION Primary Data B.M. Collage of Business Administration Page 4
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. To understand the credit appraisal policy and NPA recovery policy of bank
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CHAPTER: 4 LIMITATION
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DEFINITION OF BANK
An organization, usually a corporation, chartered by a state or federal government, which does most or all of the following: receives demand deposits and time deposits, honors instruments drawn on them, and pays interest on them; discounts notes, makes loans, and invests in securities; collects checks, drafts, and notes; certifies depositor's checks; and issues drafts and cashier's checks.
DEFINITION OF BANKING
In general terms, The business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit So we can say that Banking is a company, which transacts the business of banking. The Banking Regulations Acts defines the business as banking by stating the essential function of a banker. The term banking is defined as Accepting for the purpose of leading or investment, deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise.
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I
The General Bank of India was set up in the year 1786. Next were Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority.
PHASE II
Government took major steps in this Indian Banking Sector Reform after independence. In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a large scale especially in rural and semi-urban B.M. Collage of Business Administration Page 13
PHASE III
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securing monetary stability and . To operate the credit and currency system of the country to its advantage
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Public
Private
Co-operative bank
Foreign bank
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CITY BANK
GENERAL INSURANCE Bank has tied with IFFCO-TOKIYO General Insurance. It is joint venture between IFFCO a big fertilizer company in co-operative sector & TOKIYO General Insurance Japans No 1 & worlds No 5 General Insurance Co. All B.M. Collage of Business Administration Page 24
BOARD OF DIRECTORS
NO.
NAME
DESIGNATION
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ORGANISATION STRUCTURE
(CHAIRMAN)
B.M. Collage of Business Administration Page 26
(CEO) (CHIEF MANAGER) (DIVISIONAL MANAGER) (AREA MANAGER) (BRANCH MANAGER) (OFFICER/CLERK)
BALANCE SHEET
(Rs. in lacs)
Liabilities
Share Capital
2006
293.23
2007
340.79
Assets
Cash & Bank
2006
1919.33
2007
1822.38
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Income
Interest & Comm. Other Income
2006
2007
Expenses
Interest paid Operating Exp. Depreciation Provisions Profit for the year
2006
816.59 390.48 46.45 12.86 305.76 1572.14
2007
956.84 526.34 46.52 112.94 236.37 1879.01
1572.14 1879.01
BRANCHES
1 Main Branch 20, Belgium Chamber, Delhi Gate Ring Road Suart-3. B.M. Collage of Business Administration Page 28
2. Rander Branch 11, Patel Park, Tadwadi,Rander Road, Surat-9. 3. Adajan Branch 2, River Park Row House, Adajan Surat-9. 4 Ved Katargam Branch 24 Ground Floor Parth Building,Singapoor (ved) Katargam, Surat. 5. Abhishak Branch 1,Balaji Market , Ring Road, Surat 2. 6. Udhana Magdalla Branch 11,Udhana Magdalla Road, Surat 7. 7. City Light Branch UG-14 Hira Panna Shopping Mall, City Light Road Surat- 7.
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NON-PERFORMING ASSETS
. MEANING
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. DEFINITION A NPA was defined as credit in respect of which interest and/or installment of principal has remained past due for a specific period of time. The specific period of time was reduced in a phased manner as under:
An amount is considered as past due, when it remains outstanding for 30 days beyond the due date. However, with effect from March31, 2001 the past due concept has been dispensed with and the period is reckoned from the due date of payment.
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Tier 2 bank like all the Urban Co-Operative Banks (UCBs) other than the Tier 1 bank i.e. Unit bank shall classify their loan accounts as NPA as per 90 day norm as hitherto.
NARSIMHAN COMMITTEE
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ASSETS CLASSIFICATION
. CHART OF ASSETS CLASSIFICATION B.M. Collage of Business Administration Page 35
ASSETS
NON-PERFORMING ASSETS
SUB-STANDERED ASSETS
DOUBTFUL ASSETS
LOSS ASSETS
1 TO 3 YEARS
ABOVE 3 YEARS
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AS ON 31-03-2007 Sub-Standard assets Doubtful up to 1 year Doubtful asset of 1 year to 3 year Doubtful asset of more than 3 year Loss asset
In simple terms the classification of assets should be done by considering the well defined credit weaknesses & extent of dependence on collateral security for realization of dues. In accounts where there is a potential threat to recovery on account and existence of other factor such as fraud committed by borrowers it will not be prudent for bank to classify that account first as sub-standard and then as doubtful. Such account should be straight away classified as doubtful asset or loss asset, as appropriate, irrespective of the period for which it has remained as NPA. 2. ADVANCES GRANTED UNDER REHABILITATION
PACKAGES: Banks are not permitted to do classification of any advances in respect of which the term have been re-negotiated unless the package of re-negotiated terms has worked satisfactory for a period of one year. A similar relaxation is also made in respect of SSI units which are identified as sick by banks themselves and where rehabilitation packages programs have been drawn by the banks themselves or under consortium arrangements.
3. INTERNAL SYSTEM FOR CLASSIFICATION OF ASSETS AS NPA: Banks should establish appropriate internal systems to eliminate the tendency to delay or postpone the identification of NPAs, especially in respect of high value accounts. The banks may fix a minimum cut-off point to decide B.M. Collage of Business Administration Page 40
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PROVISIONING NORMS
According to the norms the provisions should be made on the nonperforming assets on the basis of classification of assets as we have already discussed. Taking in to account this provisioning norms the banks have to make provision on different assets like Loss Assets, Doubtful Assets and Standard Assets as below :-> ( | ). LOSS ASSETS The entire assets should be written off after obtaining necessary approval from the competent authority and as per the provisions act of C0-operative society Act. If the assets are permitted to remain in the books for any reason, 100% of the outstanding should be provided for. If expected salvage value of the loss asset is negligible then 100% provision should be made on it.
( || ). SUB-STANDARD ASSETS A general provision of 10% on the total outstanding should be made on the advances given. B.M. Collage of Business Administration Page 42
Period for which the advance has remained in doubtful category Up to one year One to Three year More than Three year ( | ) Outstanding NPA as on March 31,2007
Provision Requirement 20% 30% - 50% as on March 31, 2007 - 60% as on March 31, 2008 - 75% as on March 31, 2009 - 100% as on March 31, 2010
( || ) Advances classified as doubtful for more than three years on or after April1, 2007
-100%
( |V ). STANDARD ASSETS From the year ended March 31, 2000, the banks should make a general provision of a minimum of 0.25% on the standard assets. However, Tier 2 banks are required to do higher provisioning on standard assets as under:A. General provisioning requirement is 0.40% from the present level of 0.25%. But incase of agriculture or in SME investors the provisioning rate is required to be 0.25%. ( V| ). HIGHER PROVISIONS B.M. Collage of Business Administration Page 43
There is no objection if the banks create bad and doubtful debts reserve beyond the specified limits on their own or if provided in the respective State Co-operative Societies Acts.
MANAGEMENT OF NPA
t is very necessary for bank to keep the level of NPA as low as possible. Because NPA is one kind of obstacle in the success of bank so, for that the management of NPA in bank is necessary. And this management can be done by following way: . Framing reasonably well documented loan policy and rules. . Sound credit appraisal on well-settled banking norms. . Emphasizing reduction in Gross NPAs rather then Net NPAs . Pasting of sale notice/ wall posters on the house pledged as security. . Recovery effort starts from the month of default itself. Prompt legal action should be taken. . Position of overdue accounts is reviewed on a weekly basis to arrest slippage of fresh account to NPA. . Half yearly balance confirmation certificates are obtained from the borrowers regularly. . A committee is constituted at Head Office, to review irregular accounts. . Due to lower credit risk and consequent higher profitability, greater encouragement is given to small borrowers. . Recovery competition system is extended among the staff members. The recovering highest amount is felicitated. . Adopting the system of market intelligence for deciding the credibility of the borrowers . Creation of a separate Recovery Department with Special Recovery Officer appointed by the RCS
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RECOVERY OF NPA
. IMPORTANCE OF RECOVERY: 1. Increase in the income of bank. 2. Increase in the trust of share holder in bank. 3. Level of NPA reduces as the recovery done. 4. Decrease in provisioning requirements.
. STEPS TAKEN BY GOVERNMENT TO RECOVERING NPA: 1. SECURITIZATION ACT @. Now this act is also applicable to all Urban Co-Operative Banks. @. According to this act Bank can take direct possession of the movable and immovable property mortgages against loans and sell out the same for such recovery, without depending on legal process in the court. 2. Gujarat state has also by amending under co-op soc, act empower co-op bank to appoint their staff as recovery officer on getting order from the board of nominees. Above both act are benefited to bank for the recovery of NPA.
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CHAPTER: 8
B.M. Collage of Business Administration Page 46
. POLICY ON PRE-SANCTION 1. Application for loan should be in standardized form as devised by the bank. 2. Branch to collect all the papers/information/documents as suggested in the respective application form. 3. Branch to visit the borrowers office/factory/residence and to satisfy themselves before recommending any loan to higher authority and to keep record of such visit. 4. If applicant maintains loan/current/saving account with any other bank/financial institutions, branch to verify such account statement and to satisfy them. 5. Branch to ascertain the promptness of applicant in making payment of Power bill/Property Tax/LIC Premium/Existing loan interest or installment, before recommending the proposal to higher authority.
. APPRAISAL A. WORKING CAPITAL FACILITY 1. Working capital requirement to be assessed properly considering past performance, holding period for debtors as also for inventory at various level, sales, etc 2. Working capital facilities beyond Rs. 5 lacs should not be considered in the form of overdraft. B.M. Collage of Business Administration Page 48
3. Margin for CC against stock be 30% and for receivables 50%. B. TERM FINANCE 1. term loan limit to be arrived @ 25% margin in respect of Machinery/Equipment and Vehicles while 50% against land & building, electrification, furniture fixtures. 2. Sources for margin money to be ascertained. 3. Repayment capacity, considering existing earning to be ascertained. 4. Moratorium period to be fixed considering time required going in for commercial production. C. GENERAL 1. Credit facilities should not exceed segment wise, individual as also group exposures.
2. in case of switch over from other bank, branch to obtain credit information report from the concerned bank. 3. In case of existing borrower/group borrower, branch to satisfy themselves about their dealing with the bank. . EXPOSURE As per the RBI guidelines per party exposure is restricted to 15% of share capital and Free Reserves and group exposures it is 40%. RBI has given liberty to recalculate the exposure on the basis of profitability of September
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5. LOAN COMMITTEE All types of loans to single borrower up to Rs.77.50 lacs and Rs.1.75 crores for group borrower. 6. BOARD All types of loan within exposure ceiling for individual and group borrower.
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@. Renewal of working capital facility 1. Personal balance sheet of proprietor/partner/directors is also to be obtained. 2. Branch to submit the renewal papers along with memorandum for renewal to higher authority for renewal, with its comments on performance with the bank, financial performance viz. sales, profit etc
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4. If the branch does not get any favorable response, during personal visit, they should write a notice letter to borrower. 5. If borrower still behaves irresponsible, they should meet the guarantor and ask guarantor to peruse the borrower. Guarantor must be informed about legal complication to arise if borrower fails to repay the dues. 6. On failure of all the recovery steps, branch to contact Area office/Control centre. 7. Area office/Control centre to call the borrower along with guarantor and try to find out the reason for overdue. If borrower is in genuine difficulty, problem to be resolved in a mutually acceptable and in an orderly manner. 8. If party behaves indifferent, legal actions must be initiated. In such case prompt legal action and seizure action to be taken. Preference to be given for steps under Securitization Act rather than go for filling a case in the court of Board of Nominees. 9. Reasonable notice would be given before Repossession of Security and its realization, unless the borrower is about to dispose of/remove the whole or any part of the security from the locality where it ordinarily remained or by whom it is used or caused to be remained or used, as the case may be, at the time of creation of security. 10. The aim of possession under Securitization or State co-op. Act will be to recover the dues and will not be aimed at whimsical deprivation of the property. The bank shall resort to repossession of B.M. Collage of Business Administration Page 55
CHAPTER: 9
B.M. Collage of Business Administration Page 56
ANALYSIS OF DATA
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N P A OF 2003
LO S S A S S E TS 2755 0.2 D O U B TF U L A S S E TS 4.922324 % of Total S U B -S TA N D A R D A S S E TS 2.94929 1 S TA N D A R D A S S E TS 0 20 40 60 91.90084 80 100
ASSETS-->
V A L U ES -->
. YEAR 2004 (RS. IN LACS) Details STANDARD ASSETS SUB-STANDARD ASSETS DOUBTFUL ASSETS LOSS ASSETS TOTAL B.M. Collage of Business Administration Amount 6923.74 143.60 291.00 10.84 7369.18 %of Total 93.95 1.95 3.95 0.15 100 Page 58
N P A O F YE AR 2004
LO S S A S S E TS.1 5 0 D O U B TF U L A S S E TS.9 5 3 % o f To ta l S U B -S TA N D A R D A S S E TS5 1 .9 S TA N D A R D A S S E TS 0 20 40 60 9 3 .9 5 80 100
ASSETS-->
V A L U E S -->
. YEAR 2005 (RS. IN LACS) Details STANDARD ASSETS SUB-STANDARD ASSETS DOUBTFUL ASSETS LOSS ASSETS TOTAL Amount 7266.63 156.65 278.40 1.04 7707.72 %of Total 94.28 2.03 3.61 0.01 100
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N P A O F YE A R 2 0 0 5
LO S S A S S E TS 0.01 D O U B TF UL A S S E TS 3.61 % of Total S U B -S TA N D A RD A S S E TS 2.03 S TA ND A R D A S S E TS 0 20 40 60 80 94.28 100
ASSETS-->
V A L UES -->
. YEAR 2006 (RS. IN LACS) Details STANDARD ASSETS SUB-STANDARD ASSETS DOUBTFUL ASSETS LOSS ASSETS TOTAL Amount 6867.81 12.24 213.58 0.00 7093.63 %of Total 96.82 0.17 3.01 0.00 100
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N P A OF YE AR 2006
L O S S A S S E TS 0 D O U B TF U L A S S E 3 .0 1 TS % o f To ta l S U B -S TA N D A R D A S S0 .1 7 E TS S TA N D A R D A S S E TS 0 9 6 .8 2
ASSETS-->
. YEAR 2007 (RS. IN LACS) Details STANDARD ASSETS SUB-STANDARD ASSETS DOUBTFUL ASSETS LOSS ASSETS TOTAL Amount 9801.49 120.12 258.80 159.85 10340.26 %of Total 94.78 1.16 2.50 1.54 100
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ASSETS-->
V A L U ES -->
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2005 SEGMENT NO OF A/C 267 AMOUNT TOTAL ADVANCES 752.63 NPA 17.69 NO OF A/C 248
RETAIL TRADE
SMALL BUSINESS
31
46.48
4.38
25
44.17
20.15
122
88.02
50.93
582
4021.55
210.74
642
3832.29
44.88
975
6323.86
180.86
246
323.43
21.02
231
343.86
2.70
345
459.76
22.43
AGRICULTURE
3.72
0.00
0.00
0.00
517
115.64
0.12
10
5.23
0.00
0.00
0.00
34
8.18
1.90
PROFESSIONAL
84
89.81
5.00
7.33
0.00
80
72.52
3.10
10.71
0.00
3.41
0.00
7.26
0.00
0 375 1599
55 285 1496
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1. GROSS NPA RATIO. 2. NET NPA RATIO. 3. PROBLEM ASSETS RATIO. 4. SHAREHOLDERS RISK RATIO. 5. PROVISION RATIO. 6. SUB-STANDARD ASSETS RATIO. 7. DOUBTFUL ASSETS RATIO. 8. LOSS ASSETS RATIO.
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PERCENTAGES-->
5 .2 1% R AT IO
2 0 03
20 0 4
2 00 5 Y EAR -->
2 0 06
20 0 7
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Gross NPA ratio shows the banks credit appraisal policy. High Gross NPA ratio means bank have liberal appraisal policy and vice-versa. In city bank this ratio was 8.10% in March-2003 and it has been decreased from year 2003 to 2006 from 8.10% to 3.18%. But again in March-2007 this ratio reach at 5.21%. This variation was come because City bank has merged with Baroda dist. Co-op. bank in the financial year 2006-2007. However it is revels from the chart that banks Gross NPA ratio is continuously decreasing which is positive trend for bank and we can say that bank have good appraisal system.
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Net NPA = Gross NPA Provision for NPA Net Advances = Gross NPA Provision for NPA
NET NPA RATIO 6.00% PERECNTAGE--> 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2003 0.00% 2004 0.00% 2005 YEAR--> 0.00% 2006 0.00% 2007 NET NPA RATIO 4.82%
. ANALYSIS
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Net NPA ratio shows the degree of risk in portfolio of bank. High net NPA ratio means banks dont have enough fund to do provision against the Gross NPA. In City Bank Net NPA ratio was 4.82% in year March-2003 which shows that in that year bank had not enough fund for provisions. But after that from March-2004 to March2007 Net NPA ratio is 0.00% which shows that bank has now enough provision capacity. So, here the degree of risk is less. City bank has done more provision every year which is good at one side but at other side it also reduces the profit of bank. And shareholder will get fewer dividends. When all bank will do provision then Net NPA will become zero but if we want to know the true and fair situation of bank we must consider the Gross NPA of bank.
3. PROBLEM ASSETS RATIO This ratio is also known as the Gross NPA to Total Assets ratio. This ratio shows the percentage of risk on the total assets of the bank. High ratio means high risk for bank. Problem Assets Ratio = Gross NPA Total Assets (RS. IN LACS) PROBLEM YEAR 2003 2004 GROSS NPA 521.08 445.44 TOTAL ASSETS 13381.91 15935.97 ASSETS RATIO (%) 3.89% 2.80% Page 68 *100
PROBLEM ASSETS RATIO 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00%
PERCENTAGE-->
2003
2004
2005 YEAR-->
2006
2007
. ANALYSIS This ratio shows the percentage of risk on the assets of bank. It shows the level of risk on banks assets. High ratio shows the high risk on liquidity. In City Bank this ratio was 3.89% in March-2003 and after that it has been decreased from 3.89% to 1.21% in March-2006. But again it increase to 2.23% in March-2007 because in that year City Bank was merged with Baroda dist. Co-op. bank in the financial year 2006-2007. This ratio is continuously decreasing in bank except in March-2007. But overall this ratio is good for bank which indicates the level of risk is low in bank.
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*100
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S HARE HOLDERS RIS K RA TIO 18.00% 16.68% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2003 2004 2005 2006 2007 YEAR-->
PERCENTAGE-->
. ANALYSIS This ratio shows the degree of risk with share holders investment. High ratio means high ratio with the investment. In City Bank this ratio was 16.68% in year March-2003 which shows that in that year risk on share holders investment was quite high but after that this ratio is 0.00% up to year March-2007, which shows that Bank have enough capacity for provision and the risk on investment is nil. As we know that this ratio is 0.00% show the risk is nil but on the other side because of more provision the profit will decrease and the shareholder will get less dividends. B.M. Collage of Business Administration Page 71
5. PROVISION RATIO
Provisions are to be made against the Gross NPA of bank. As bank make provision for NPA it directly affects the profit of bank. This ratio shows the relation of total provision to Gross NPA. Provision Ratio = Total Provision Gross NPA (RS. IN LACS) YEAR TOTAL PROVISION PROVISION GROSS NPA RATIO (%) *100
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PROVISION RATIO 250.00% PERCENTAGE--> 200.00% 150.00% 100.00% 50.00% 0.00% 2003 2004 2005 YEAR--> 2006 2007 42.59% 112.60%
208.59%
107.83%108.00%
PROVISION RATIO
. ANALYSIS
Provision ratio shows the degree of provision that is made against the Gross NPA of bank. As bank made the provision it directly affect the profit of bank and also the dividend payout ratio of bank too. If Provision ratio is less then it means that bank has make under provision and if provision is more then it means that it is over provision. In City Bank they have made 42.59% provision in March-2003 which shows that it was under provision but after that in March-2004 and March-2005 it is 107.83% and 108% respectively which indicate that provision was nearer to total amount of Gross NPA but in B.M. Collage of Business Administration Page 73
*100 (RS. IN LACS) SUB-STANDARD ASSETS RATIO (%) 36.41% 32.24% 35.92%
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S UB -S TA NDA RD A S S E TS RA TIO 40.00% 36.41% 35.00% PERCENTAGE--> 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 2003 2004 2005 YEAR--> 2006 2007 5.42% 22.30% S UB -S TA NDA RD A S S E TS RA TIO 32.24% 35.92%
. ANALYSIS This ratio shows the percentage of Sub-Standard assets in the Gross NPA of bank. High Sub-Standard ratio means more proportion of Sub-Standard asset in the Gross NPA. High ratio shows that there is a chance of recovery of assets is high. In City bank this ratio was 36.41% in March-2003 which is good for bank and it is 5.42% in year March-2006 which is not good for bank. As the level of Sub-Standard assets are more the chances of recovery of NPA are high.
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DO UB TF UL A S S E TS RA TIO 94.58% 100.00% 90.00% 80.00% 65.33% 63.84% 70.00% 60.78% 60.00% 48.03% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 2003 2004 2005 2006 2007 YEAR-->
. ANALYSIS This ratio shows the percentage of Doubtful assets in the Gross NPA of bank. High Doubtful assets ratio means more proportion of Doubtful asset in the Gross NPA. More Doubtful assets means Bank should take action through recovery policy to reduce the level of Doubtful assets. As the Doubtful assets ratio is high which shows that bank should take quick action to reduce that level. This ratio should be less for the bank. B.M. Collage of Business Administration Page 77
PERCENTAGE-->
DO UB TF UL A S S E TS RA TIO
In City Co. Bank this ratio is in between from 60.00% to 65.00% in year from March-2003 to March-2005 but in March-2006 this ratio reach at 94.58% which indicate that bank must take some necessary action to recover it. And again in March-2007 this ratio decrease to 48.03% which is good for bank.
*100 (RS. IN LACS) LOSS ASSETS RATIO (%) 2.81% 2.43% 0.24% 0.00% 29.67%
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29.67%
. ANALYSIS This ratio shows the percentage of loss assets in the Gross NPA of bank. High loss assets ratio means more proportion of loss asset in the Gross NPA. This should be less in bank. The high ratio indicates that bank has more fraudulent account and it is bad for bank. The bank must take necessary action to reduce the level of loss assets. In City Co. Bank this ratio is 2.81% in March-2003 and from it reach at 0.00% in the year March-2006. This ratio is decreasing in bank which is good for bank but again in March2007 this ratio reaches at 29.67% which is the very high increase and it is very bad for bank. But the increase in the ratio of March-2007 is because bank was merged with Baroda dist. Co-op. bank in that year. Hence, bank should take some action to reduce the level of loss assets from the total NPA.
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YEAR
SUBSTANDARD ASSETS DOUBTFUL ASSETS LOSS ASSETS TOTAL NPA
2005
156.65 278.40 1.04 436.09
2006
12.24 213.58 0.00 225.82
2007
120.12 258.80 159.85 538.77
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CLASSIFICATION OF NPA
600 500 400 300 200 100 0 2003 2004 2005 2006 2007 YEAR--> PERCENTAGE-->
YEAR
TOTAL NPA STANDARD ASSETS TOTAL ADVANCES
2003
521.08 5912.67 6433.75
2004
445.44 6923.74 7369.18
2005
436.09 7266.63 7707.72
2006
225.82 6867.81 7093.63
2007
538.77 9801.49 10340.26
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C L A S S IF IC A T IO N O F T O T A L A D V A N C E S
1200 0 1000 0 RS IN LACS--> 800 0 600 0 400 0 200 0 0 200 3 200 4 2005 200 6 200 7 YEA R --> TO TA L N P A S TA N D A R D A S S E TS TO TA L A D V A N C E S
CHAPTER: 10
B.M. Collage of Business Administration Page 84
CONCLUSION
Now as we know that NON-PERFORMING ASSETS is like a black spot on diamond. They affect the profit of bank and also the financial health of bank. This NPA have number of effects on banks working. During my training in bank I gathered as much as possible information about NPA from bank and on the basis my experience I conclude the following points: City Co. banks NPA level is decreasing year by year which good for bank.
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1. City Co. banks NPA level is decreasing year by year which good for bank but bank should follow the recovery policy strictly. 2. In year 2007 City Co. banks own NPA is very low but because of merger with Baroda industrial co-op bank the level of NPA increase so City Co. bank should have consider the NPA situation of that bank before merger. 3. In City Co. bank there is no any special recovery department so bank should develop the department for the fastest recovery of NPA. 4. Bank should motivate the staff to do fast recovery NPA. 5. Bank have more NPA in Small Scale Industry so, they should try to reduce that level of NPA.
CHAPTER: 11
B.M. Collage of Business Administration Page 87
BIBILIOGRAPHY
JOURNALS
Co-Operative Bankers Diary 2008 -by John Dsalve Annual Report of City Co-Operative Bank -year, 2003, 2004,2005,2006,2007 Periodical circular and statement of RBI regarding to NPA managing and UCBs
WEBSITES
http://finance.indiamart.com/investment_in_india/banking_in_india.html Page 88
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