Vol 1 Issue 7 Art 11

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VOLUME NO.1(2010),ISSUE NO.7(NOVEMBER) ISSN0976-2183

IIINNNTTTEEERRRNNNAAATTTIIIOOONNNAAALLLJJJOOOUUURRRNNNAAALLL

OOOFFF

RRREEESSSEEEAAARRRCCCHHH

IIINNN

CCCOOOMMMMMMEEERRRCCCEEE

AAANNNDDD

MMMAAANNNAAAGGGEEEMMMEEENNNTTT

AMonthlyDoubleBlindPeerReviewedRefereedOpenAccessInternationaleJournal IncludedintheInternationalSerialDirectories

GroundFloor,BuildingNo.1041C1,DeviBhawanBazar,JAGADHRI135003,YamunaNagar,Haryana,INDIA

www.ijrcm.org.in

CONTENTS

Sr. No. Title & Name of the Author (s) Page No.

1. QUALITY OF WORK LIFE PRACTICES OF ACADEMIC PROFESSIONALS IN BANGLADESH: A FACTOR ANALYTICAL

APPROACH

BALASUNDARAMNIMALATHASAN &DR.MIRMOHAMMEDNURULABSAR6

2. SUPPLYCHAININTEGRATIONANDCOLLABORATIONUSINGE BUSINESSMODELINTEXTILEGARMENTINDUSTRY

DR.G.NIJAGUNA&DR.SWAROOPSIMHA 123. TRAININGDELIVERYANDMETHODOLOGYAMONGBANKS(ANEMPIRICALSTUDY)

DR.AJAZAKBAR&PROF.A.R.MATTOO 284. MICROFINANCEININDIAANDMILLENNIUMDEVELOPMENTGOALS:MAXIMIZINGIMPACTONPOVERTY

G.PANDI

SELVI

&

DR.

R.

KARUPPASAMY

37

5. COMPARATIVEFINANCIALPERFORMANCEEVALUATIONOFMARUTIANDHYUNDAI

ASHIMA&PROF.(DR.)S.C.CHITKARA 436. FOREIGNDIRECTINVESTMENTANDECONOMICGROWTHININDIA:ANEMPIRICALANALYSIS

RAJENDERS.GODARA,MANOJK.SIWACH&RANJAN K.ANEJA 497. STRESSINEDUCATION..ISTHISTHEULTIMATEDESTINATIONIN2020?

PROF.SUNAINAHOOGAN&PROF.DEEPAV.M 528. SMESOFANDHRAPRADESH:THEJOURNEYFARANDBEYOND

M.MADHAVI,M.SUJATHA&S.PRATIBHA 589. IMPACTOFMACROECONOMICFACTORSON LIFE INSURANCEINNOVATION ININDIA:ANEMPIRICALSTUDY

VISHALSOOD&DR.IRABAPNA 6410. CORRELATES OF EMPLOYEE SATISFACTION WITH PERFORMANCE APPRAISAL SYSTEM: A COMPARATIVE STUDY

OFINDIANANDFOREIGNMNCBPOFIRMS

HERALDMONIS&DR.T.N.SREEDHARA70

11.COMPARATIVE

ANALYSIS

ON

NON

PERFORMING

ASSETS

(NPAS)

OF

PUBLIC

SECTOR,

PRIVATE

SECTOR

AND

FOREIGNBANKSININDIA

MS.RAJNISALUJA&DR.ROSHANLAL80

12. PERCEPTIONOFTHEPOLICYHOLDERSTOWARDSTHEMARKETINGOFINSURANCE SERVICESBYTHELICOFINDIA

DR.J.ARULSURESH&DR.S.RAJAMOHAN 8913. ENTREPRENEURIALACTIVITIESOFWOMENENTREPRENEURSINGADAGDISTRICT ASTUDY

DR.A.S.SHIRALASHETTI

95

14. IMPACTOFTELEVISIONADVERTISINGON CHILDREN

M.VIJAYAKUMAR&S.THANALAKSHMI

106

15. MIGRANTWORKERS:SOCIOECONOMICSTATUSANDREMITTANCES

DR.BEENANARAYAN

110

16. BRANDLOYALTYOFTOILETRYPRODUCTSACASESTUDYOFSIRSADISTRICT

DR.MONICABANSAL&SHALLUMEHTA

118

17. CONSUMER BEHAVIOUR IN THE PURCHASE PROCESS OF TELEVISION, REFRIGERATOR AND FOOD PROCESSOR

WITH SPECIAL REFERENCE TO INCOME LEVEL (A STUDY OF HOUSEHOLD PRODUCT RELATED PERCEPTIONS &

MAJORCHOICE

DETERMINANTS

IN

CONTEXT

OF

CONSUMERS

IN

LUDHIANA

CITY)

MINAKSHITHAMAN&PRIYAAHUJA

126

18. WORKLIFEBALANCEACAUSEFORSTRESSAMONGCAREERCOUPLES

MRS.VISHALSAMARTHA,MR.LOKESHA&MS.ASHWITHAKARKERA

135

19. ATTRITIONAMONGLIFEINSURANCEADVISORSOFSELECTEDLIFEINSURANCECOMPANIESINLUDHIANA

MS.SHILPAJAIN&MS.DEEPIKAARORA

142

20 SERVICE BUYING BEHAVIOR IN BANKING INDUSTRY: A COMPARATIVE ANALYSIS OF PRIVATE AND PUBLIC

SECTORBANKS

ESHASHARMA

154

REQUESTFORFEEDBACK 158

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VOLUME NO:1(2010),ISSUE NO.7(NOVEMBER) ISSN0976-2183

INTERNATIONALJOURNALOFRESEARCHINCOMMERCE&MANAGEMENTAMonthlyDoubleBlindPeerReviewedRefereedOpenAccessInternationaleJournal IncludedintheInternationalSerialDirectories

www.ijrcm.org.in

76

CHIEF PATRONPROF.K.K.AGGARWAL

FounderViceChancellor,GuruGobindSinghIndraprasthaUniversity,Delhi

Ex.ProViceChancellor,GuruJambheshwarUniversity,Hisar(Haryana)PATRONSH.RAMBHAJANAGGARWAL

Ex.StateMinisterforHome&Tourism,GovernmentofHaryanaPresident,GoverningBody,Vaish(P.G.)College,Bhiwani

VicePresident,DadriEducationSociety,CharkhiDadri

President,ChinarSyntexLtd.(TextileMills),BhiwaniCO-ORDINATORDR.SAMBHAVGARG

Faculty,M.M.InstituteofManagement

MaharishiMarkandeshwarUniversity,Mullana,Ambala,HaryanaADVISORSPROF.M.S.SENAMRAJU

DirectorA.C.D.,SchoolofManagementStudies,I.G.N.O.U.,NewDelhi

PROF.M.N.SHARMAChairman,M.B.A.,HaryanaCollegeofTechnology&Management,Kaithal

PROF.PARVEEN

KUMAR

Director,M.C.A.,MeerutInstituteofEngineering&Technology,Meerut,(U.P.)

PROF.H.R.SHARMADirector,ChhatarpatiShivajiInstituteofTechnology,Durg,(C.G.)

PROF.S.L.MAHANDRUPrincipal(Retd.),MaharajaAgrasenCollege,Jagadhri

PROF.MANOHARLALDirector&Chairman,SchoolofInformation&ComputerSciences,I.G.N.O.U.,NewDelhiEDITOR

PROF.R.K.SHARMATecniaInstituteofAdvancedStudies,DelhiCO-EDITOR

DR.ASHOKKHURANAAssociateProfessor,G.N.KhalsaCollege,YamunanagarEDITORIAL ADVISORY BOARD

DR.AMBIKAZUTSHIFaculty,SchoolofManagement&Marketing,DeakinUniversity,Australia

DR.VIVEKNATRAJANFaculty,LomarUniversity,U.S.A.

PROF.SANJIVMITTALUniversitySchoolofManagementStudies,GuruGobindSinghI.P.University,Delhi

PROF.KRISHANCHANDMITTALSchoolofManagementStudies,PunjabiUniversity,Patiala,Punjab

PROF.SATISHKUMARDean(Management),GalaxyGlobalGroupofInstitutions,Dinarpur,Ambala

PROF.ROSHANLAL

M.

M.

Institute

of

Management,

M.

M.

University,

Mullana

PROF.ANILK.SAINIChairperson(CRC),GuruGobindSinghI.P.University,Delhi

DR.TEJINDERSHARMAReader,KurukshetraUniversity,Kurukshetra

DR.KULBHUSHANCHANDELReader,HimachalPradeshUniversity,Shimla,HimachalPradesh

DR.ASHOKKUMARCHAUHANReader,DepartmentofEconomics,KurukshetraUniversity,Kurukshetra

DR.SAMBHAVNAFaculty,I.I.T.M.,Delhi

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DR.MOHINDERCHANDAssociateProfessor,KurukshetraUniversity,Kurukshetra

DR.MOHENDERKUMARGUPTAAssociateProfessor,P.J.L.N.GovernmentCollege,Faridabad

DR.VIVEKCHAWLAAssociateProfessor,KurukshetraUniversity,Kurukshetra

DR.VIKASCHOUDHARY

Asst.

Professor,

N.I.T.

(University),

Kurukshetra

DR.SHIVAKUMARDEENEAsst.Professor,GovernmentF.G.CollegeChitguppa,Bidar,KarnatakaASSOCIATE EDITORS

PROF.NAWABALIKHANDepartmentofCommerce,AligarhMuslimUniversity,Aligarh

PROF.ABHAYBANSALHead,DepartmentofInformationTechnology,AmitySchoolofEngineering&Technology,AmityUniversity,Noida

DR.PARDEEPAHLAWATReader,InstituteofManagementStudies&Research,MaharshiDayanandUniversity,Rohtak

SURUCHIKALRACHOUDHARYHead,DepartmentofEnglish,HinduGirlsCollege,Jagadhri

PARVEENKHURANAAssociateProfessor,MukandLalNationalCollege,YamunaNagar

SHASHIKHURANA

AssociateProfessor,S.M.S.KhalsaLubanaGirlsCollege,Barara,Ambala

SUNILKUMARKARWASRAVicePrincipal,DefenceCollegeofEducation,Tohana,Fatehabad

BHAVETLecturer,M.M.InstituteofManagement,MaharishiMarkandeshwarUniversity,MullanaTECHNICAL ADVISORS

DR.ASHWANIKUSHHead,ComputerScience,UniversityCollege,KurukshetraUniversity,Kurukshetra

DR.BHARATBHUSHANHead,DepartmentofComputerScience&Applications,GuruNanakKhalsaCollege,Yamunanagar

DR.VIJAYPALSINGHDHAKAHead,DepartmentofComputerApplications,InstituteofManagementStudies,Noida

DR.ASHOKKUMAR

Head,Department

of

Electronics,

D.

A.

V.

College

(Lahore),

Ambala

City

DR.ASHISHJOLLYHead,ComputerDepartment,S.A.JainInstituteofManagement&Technology,AmbalaCity

MOHITALecturer,YamunaInstituteofEngineering&Technology,VillageGadholi,P.O.Gadhola,Yamunanagar,Haryana

AMITALecturer,E.C.C.,Safidon,Jind

MONIKAKHURANAAssociateProfessor,HinduGirlsCollege,Jagadhri

ASHISHCHOPRASr.Lecturer,DoonValleyInstituteofEngineering&Technology,Karnal

SAKETBHARDWAJLecturer,HaryanaEngineeringCollege,Jagadhri

NARENDERASINGHKAMRAFaculty,J.N.V.,Pabra,Hisar

DICKINGOYAL

Advocate&TaxAdviser,#874,Sec. 8,Panchkula

NEENAInvestmentConsultant,Chambaghat,Solan,HimachalPradeshLEGAL ADVISORS

JITENDERS.CHAHALAdvocate,Punjab&HaryanaHighCourt,ChandigarhU.T.

CHANDERBHUSHANSHARMAAdvocate&Consultant,DistrictCourts,YamunanagaratJagadhri

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CALLFORARTICLES/RESEARCHPAPERS

We invite original research papers in the area of computer, finance, marketing, HRM, Banking, Insurance, and other allied

subjects. The above mentioned tracks are only indicative, and not exhaustive. Thejournal expects unpublished and original

qualityresearcharticles/papersonly.

Youmaysubmityourarticles/papersattheemailaddresses,[email protected]@gmail.com.

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IJRCM

Subject:SubmissionofManuscript.

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Findmysubmissionofresearchpaper/articleforpossiblepublicationsinyourejournal.

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publishourcontributiontoanyofyourtwojournalsi.e.InternationalJournalofResearchinCommerce&ManagementorInternationalJournal

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5. ABSTRACT: Abstract should be in fully italicized text, not exceeding 300 words. The abstract must be informative and explainbackground,aims,methods,resultsandconclusion.

6. KEYWORDS:Abstractmustbefollowedbylistofkeywords,subjecttothemaximumoffive.Theseshouldbearrangedinalphabeticorderseparatedbycommasandfullstopattheend.

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alphabetically arranged. The author (s) should mention only the actually utilised references in the preparation of manuscript and they are

supposedtofollowthereferencesasperfollowing:

Allworkscitedinthetext(includingsourcesfortablesandfigures)shouldbelistedalphabetically. Use(ed.)foroneeditor,and(ed.s)formultipleeditors. When listing two or more works by one author, use (20xx), such as after Kohl (1997), use (2001), etc, in chronologicallyascendingorder

Indicate(openingandclosing)pagenumbersforarticlesinjournalsandforchaptersinbooks. Notethatitalicsareusedonlyfortitlesofbooksandnamesofjournals.Doublequotationmarksareusedfortitlesofjournalarticles,bookchapters,dissertations,reports,workingpapers,unpublishedmaterial,etc.

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SEETHEFOLLOWINGFORSTYLEANDPUNCTUATIONINREFERENCES:

Books

Bowersox,DonaldJ.,Closs,DavidJ.,(1996),"LogisticalManagement."TataMcGraw,Hill Hunker,H.L.andA.J.Wright(1963),"FactorsofIndustrialLocationinOhio,"OhioStateUniversity.Contributionstobooks

Sharma T., Kwatra, G. (2008) Effectiveness of Social Advertising: A Study of Selected Campaigns, Corporate Social Responsibility,EditedbyDavidCrowther&NicholasCapaldi,AshgateResearchCompaniontoCorporateSocialResponsibility,Chapter15,pp287303.

Journalandotherarticles

Schemenner, R.W.,Huber,J.C. and Cook, R.L. (1987), "GeographicDifferences and theLocation ofNewManufacturing Facilities,"JournalofUrbanEconomics,Vol.21,No.1,pp.83104.

Kiran Ravi, Kaur Manpreet (2008), Global Competitiveness and Total Factor Productivity in Indian Manufacturing, InternationalJournalofIndianCultureandBusinessManagement,Vol.1,No.4pp.434449.Conferencepapers

Chandel K.S. (2009): "Ethics in Commerce Education." Paper presented at the Annual International Conference for the All IndiaManagementAssociation,NewDelhi,India,1922June.

Unpublisheddissertationsandtheses

KumarS.(2006):"CustomerValue:AComparativeStudyofRuralandUrbanCustomers,"Thesis,KurukshetraUniversity.Onlineresources

Alwaysindicatethedatethatthesourcewasaccessed,asonlineresourcesarefrequentlyupdatedorremoved.Website

Kelkar V. (2009): Towards a New Natutal Gas Policy, Economic and Political Weekly, Viewed on 11 September 2009http://epw.in/epw/user/viewabstract.jsp

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COMPARATIVEANALYSISONNONPERFORMINGASSETS(NPAs)OFPUBLICSECTOR,PRIVATE

SECTORANDFOREIGNBANKSININDIA

MS.RAJNISALUJA

RESEARCHSCHOLAR

M.M.INSTITUTEOFMANAGEMENT

MAHARISHIMARKANDESHWAR

UNIVERSITY

MULLANA133203

DR.ROSHANLAL

PROFESSOR

M.M.INSTITUTEOFMANAGEMENT

MAHARISHIMARKANDESHWARUNIVERSITY

MULLANA133203

ABSTRACTTheburgeoningNPAs inbankingIndustryisamatterofdeepconcern.It isjustnotaproblemforbanksbutalsoprovesfataltotheeconomic

growthofthecountry.PSBsareunderseverepressuresofNPAsascomparedtoitscounterpartsthatprivateandforeignbanks.NPAsreducethe

profitabilityof

banks,

weaken

its

financial

health

and

erode

its

solvency.

In

this

study

an

attempt

has

been

made

to

compare

the

performance

of

publicandprivatesectorbanksandinforeignbanksinIndiawithspecialreferencetotheirNPAs.Forthispurposefourbanksfrompublicsector

StateBankof India,AllahabadBank,BankofBarodaandUnitedBankof India,fromprivate sector AxisBank,HDFCBank, ICICIBankand

IndusIndBank,fromforeignbanks Citibank,DeutscheBank,HSBCBankandStandardCharteredBankareselected.Acomparativeanalysisofall

threecategoriesismadeonthebasisofgrossNPAsandNetNPAs.NPAsarealsocategorisedintopriorityandnonprioritysectorforpurposeof

analysis. The study concludes that there is huge difference in NPAs of public, private and foreign banks. Public sector banks are highly

pressurisedbytheNPAs.Moreover,greaterquantumofNPAsisobservedinnonprioritysectorthaninprioritysector.NPAsarenotconfinedto

PSBsalonebutarepresentinprivatebanksandforeignbanksaswell.

KEYWORDSBankingIndustry,EconomicGrowth,ForeignBanks,Profitability,PerformanceandNonPrioritySector

INTRODUCTIONLending is one of the core activities of the banks. The process of lending is associated with large number of risks mainly credit risk. The

concentrationofbankingmanagementduringpresentdaysistokeeplossesarisingoutofcreditrisksatlowestlevels.Bankshavebecomevery

cautiousin

extending

loans.

The

reason

behind

mounting

NPAs

is

banks

lending

policies.

It

is

rightly

said

that

Banks

lending

policy

is

amajor

driverofnonperformingloans.TherisingNPAsposeseriousthreatnotonlytobanksprofitability,liquidityandsolvencybutalsoprovefatalto

theeconomicgrowthofthecountry.SotheproblemofNPAshouldbenippedinthebud.ItispossibleonlyifthecheckisplacedonNPAsfrom

theverybeginning.Eagleseyeshouldbekeptonloanproposal,itsusageshouldbeproperlymonitoredandfollowedupandviablecollection

policyshouldbe framed. Theprudential norms introducedprovide notonlytransparency in financialposition but alsoenables thebanks to

managetheirassetsmoreefficiently.

ThemagnitudeofNPAsinbanksandfinancialinstitutionsisoverRs.1,50,000crores.AnanalystholdtheviewthatNPAsofbanksareexpected

tomorethandoubleto5%oftotaladvancesinthenexttwoyears.ThebankingIndustrysratioofgrossnonperformingassetstototalassetsis

projectedtoincreasetoaround5%byMarch31,2011from2.3%asonMarch31,2008.Thebiggestchallengebankingindustrynowfacesare

themanagementofNPAs.LevelsofNPAsofabankareconsideredtobemeasureofitsassetqualityandinturnitsperformanceandrating.Itis

levelofNPAs whichdistinguishbetweengoodandbadbanks.NarasimhamCommittee (Iand II)highlightedthe importance ofNPAsand its

management, NPAs constitute a real economic cost to the nation in that they reflect the application of scarce capital and credit funds to

unproductiveuses.ThemoneyslockedupinNPAsarenotavailableforproductiveuseandtheextentthatbanksseektomakeprovisionsfor

NPAsandwritethemoff,itisachargeontheirprofits.NPAs,inshortarenotjustproblemforbanks,theyarebadfortheeconomy.

MEANINGOFNONPERFORMINGASSETS(NPAs)An

asset

which

ceases

to

generate

income

for

the

bank

is

called

aNon

Performing

Asset.

A

non

performing

asset

(NPA)

was

defined

as

acredit

facility inrespectofwhichthe interestand/or instalmentofprincipalhasremained pastdueforaspecifiedperiodoftime.Withaviewto

movingtowardsinternationalbestpracticesandtoensuregreatertransparency,ithasbeendecidedtoadoptthe90daysoverduenormfor

identificationofNPAs,fromtheyearendingMarch31,2004.LoanorAdvanceorAssetshallbenonperformingwhere:

Interestand/orinstalmentofprincipalremainoverdueforaperiodofmorethan90daysinrespectofatermloan. Theaccountremainsoutoforderforaperiodofmorethan90days,inrespectofanoverdraft/cashcredit(OD/CC). Thebillremainsoverdueforaperiodofmorethan90daysinthecaseofbillspurchasedanddiscounted. Interestand/orinstalmentofprincipalremainsoverduefortwoharvestseasonsbutforaperiodnotexceedingtwohalfyearsinthecaseofan

advancegrantedforagriculturalpurposes.

Anyamounttobereceivedremainsoverdueforaperiodofmorethan90daysinrespectofotheraccounts.

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NPASAREOFTWOTYPES

GrossNPAs NetNPAs

GrossNPAsarethesumtotalofallloanassetsthatareclassifiedasNPAsasperRBIguidelinesasonBalanceSheetdate.GrossNPAreflectsthe

qualityoftheloansmadebybanks.Itconsistsofallthenonstandardassetslikeassubstandard,doubtfulandlossassets.

GrossNPAsRatio=GrossNPAs/GrossAdvances

NetNPAsarethosetypeofNPAsfromwhichthebankhasdeductedtheprovisionregardingNPAs.NetNPAshowstheactualburdenofbanks.

TheprovisionsagainsttheNPAsaretobemadeasperRBIguidelines.ThatiswhydifferencebetweengrossandnetNPAisquitehigh.

NetNPA=

Gross

NPAs

provisions/Gross

Advances

Provisions

CLASSIFICATIONOFADVANCES

Higher provisioning is required for higher level of NPAs. Provisioning requirements adversely affect the profitability and operations of the

banks.Thismakesthefurtherlendingdifficult.Advancescanbeclassifiedintofourcategoriesasfollows:

StandardAssets ThisisnotNPA.Itcarriesonlynormalcreditrisk.Noprovisionisrequired. SubStandardAssets ThisisanNPAforperiodnotexceedingtwoyearsrequiringaprovisionof10percentofoutstandingbalance. DoubtfulAssets ThisisanNPAforaperiodexceedingtwoyearsrequiringaprovisionof100percentofunsecuredportionofadvances. LossAssetsAnassetmaybetreatedaslossassetevenifithasnotbeenconsideredassubstandardordoubtfulearlier.Theentireassetshould

bewrittenoff.

REASONSFORMOUNTINGNPAs

LargenumbersofinstitutionalandinfrastructuralfactorsareresponsiblefortheproblemNPAs.

Indianbankingindustryishighlypoliticised.Largescaleloanwriteofforderedbypoliticianspromotesacultureofindisciplineandlawlessnessamongborrowers.

Legalframeworkofthecountryisinefficient.TheinefficiencyoflegalsystemcanbeassessedbythevalueofcasespendinginthecourtsoflawrepresentingaboutRs21,825crores.

Properaccountabilityandresponsibilityfortakingwrongdecisionsregardinggrantingloansisnotfixed. Lackofpropermonitoringsystemforcreditappraisalandeffectivefollowupduetolargenumberofaccounts. Themembersappointedtobankingboardsaregenerallynotbankingexpertsandprofessionalpeople.Autonomyisalsonotgrantedtoboard. PrioritysectorlendingandlendingunderGovernmentsponsoredschemes. Thereisinadequacyinriskmanagementpracticeswhichfailstoidentify,assessandminimisetherisksandenhancethereturns. Strictandadequateprudentialnormsarenotimplementedduetowhichfinancial statementsfailtopresentaccuratepictureofthe

levelofrisk.

Thereareseveralfactorsrelatedtotheborrowerwhichadverselyaffecttheirrepayment.

Diversionoffunds Technologicalchanges Powershortage BusinessFailures Inefficientmanagement Industrialrecession Strainedlabourrelations Priceescalation Seriousinherentoperationalproblems Naturalcalamities

Inadditiontherecouldbedeliberatenoncomplianceandwilfuldefaultfromcertainborrowers.

IMPACTOFNPAs

NPAaccountsdonotgenerateanyincome.ItputpressureontheinterestincometotheextentofinterestaccruedonNPAs. Provisioningoftheassetsdependingonitsstatusputpressureonpartofprofits. LargelevelofNPAsresultsinassetliabilitymismatch. Itismandatoryforbankstofundthesubstandardassets.LevelofNPAstototalcreditincreases,theliquidityriskofbankalsoincreases. TimeandeffortsofmanagementinhandlingandmanagingNPAwouldhavedivertedtosomeotherproductiveactivities. NPAsadverselyaffectthevalueofbankintermsofmarketcredit. Bankswillloseitsgoodwillandbrandimage.

MANAGEMENTOFNPAs

ManagingNPAsandkeepingitatlowlevelshasbecomematterofdeepconcernforbankingIndustry.Manylegalandnonlegalremediesare

available for this purpose but generally nonlegal remedies are popular with banks. Legal remedies most result in delays. Indian banking

Industrymostlyrelyonthefollowingmeasures:

TwoapproachesforresolutionofNPAsinpublicsectorbanksaresuitfiledandBoardforIndustrialandFinancialReconstruction(BIFR). BanksarerequiredtosubmitthelistofsuitfiledcasesofRs.10millionandaboveandsuitfiledcasesofwilfuldefaultersofRs.2.5millionand

abovetoRBIaswellasCIBIL(CreditInformationBureau).

DebtRecoveryTribunalsentertaincasesforrecoveryofdebts. LokAdalatshelpstoresolvedisputesbetweenpartiesbyconciliation,mediation,compromiseandamicablesettlement.Ithelpsinsettlement

ofsmallaccounts.

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SARFAESI Act, 2002 was an important landmark in thereforms in the financial sector. TheAct enables the settingup of asset managementcompanies,addressingtheproblemofNPAsofbanksandFIsandenhancingcreditorrights.

OneTimeSettlementandNegotiatedsettlementschemesarealsoavailable.AsperOTSscheme,OTSforNPAsupto10crore,theminimumamounttoberecoveredshouldbe100percentoftheoutstandingbalanceintheaccount.

Preventivemeasuressuchasproperdocumentationofcreditpolicy,creditauditshouldbeimmediatelydoneaftersanction.QuickdiagnosisofsuchaccountsshouldbemadesothattheydonotbecomeNPAs.

SpecialcellsshouldbeappointedtofollowupDebtRecoveryTribunalcases. Doubtfulandlossassetsshouldbewrittenoffwithintheframeworkofbroadparameters. Duesofsickcompaniescanbesettledthroughcompromiseandonetimesettlement. PSBsshouldusetheirextensivenetworkforlendingforwholesaleandretailtrade,housing,agricultureetcinordertoreduceNPAs.

Rigorouseffortsonthepartofbankscoupledwithpolicyinitiativeswillhelpbankstoimprovetheirperformance.Itisimportanttopreventthe

deterioration of asset quality and timely handling of potential NPA accounts. Three key steps which should be strictly followed in order to

prevent the occurrence of NPA accounts: i) Regular monitoring of the performance of each loan asset and its periodic review. ii) Early

identificationofproblemassetsforthesuccessofremedialaction.iii)Effectivefollowupforrecovery.

OBJECTIVESOFTHESTUDY ToevaluateNPAs(GrossandNet)indifferentbanks. TostudythepasttrendsofNPA. TomakecomparativeanalysisofNPAsofpublic,privateandforeignbanks. TosuggestsomemeasurestolowerthelevelonNPAs.

RESEARCHMETHODOLOGYThestudyismainlydescriptiveinnature.ItismainlybasedonsecondarydatathathasbeencollectedfromthepublisheddocumentofReserve

BankofIndiaviz.ReportonTrendandProgressonBankinginIndia.Fourpurposesofthestudyfourbanksfromeachofpublicsector,private

sectorandforeignbanksareselected. Statisticaltoolslikeaveragesandpercentagesaremadeuseof.

ANALYSISANDINTERPRETATIONFor the purpose of analysis and comparison between three bank groups Public sector banks (PSBs), Private sector banks (PBs) and Foreign

Banks (FBs), four banks from each of the sectors are taken to compare the non performing assets of the banks. Four Public sector banks

selectedforthepurposeofthestudyare:AllahabadBank(AB),BankofBaroda(BOB),UnitedBankofIndia(UBI),StateBankofIndia(SBI).Four

privatesectorbanksselectedforthestudyare:AxisBank,HDFCBank,ICICIBank,IndusIndBank.Foreignbanksthatareincludedinstudyare:

Citibank, Deutsche Bank, HSBC Bank, Standard Chartered Bank. Non Performing Assets are further bifurcated into priority sector and non

prioritysector,GrossNPAandNetNPAintermsofpercentages.

GROSSNPAANDNETNPATherearetwoconceptsrelatedtononperformingassetsgrossandnet.GrossreferstoallNPAsonabanksbalancesheetirrespectiveofthe

provisions made. It consists of all the nonstandard assets viz. substandard, doubtful and loss assets. Net NPA isgrossNPA less provisions.

GrossNPAreflectsthequalityoftheloansmadebybankswhereasNetNPAshowstheactualburdenofbanks.Here,grossandnetNPAdatafor

lastfive

years

2004

05

to

2008

09

is

taken

for

the

purpose

of

comparison

among

banks

and

to

observe

past

trends

of

NPAs.

Gross

and

Net

NPAsaretakenaspercentageoftotalAssets.

Table1:GrossNPAaspercentageoftotalassetsofPSBs.

Year/Bank AB BOB UBI SBI

20042005 2.84 3.51 2.50 2.71

20052006 2.14 2.11 2.24 1.95

20062007 1.62 1.46 1.93 1.76

20072008 1.22 1.10 1.40 1.78

20082009 1.1 0.8 1.6 1.6

Table1.1:GrossNPAaspercentageoftotalassetsofPBs.

Year/Bank AxisBank HDFCBan k ICICIBank IndusInd

Bank

20042005

0.82 0.85 1.65 2.1

20052006 0.76 0.69 0.88 1.5

20062007 0.57 0.72 1.20 1.6

20072008 0.45 0.68 1.90 1.7

20082009 0.6 1.1 2.5 0.9

Table1.2:GrossNPAaspercentageoftotalassetsofFBs.

Year/Bank Citibank DeutscheBank HSBCBank StandardCharteredBank

20042005 1.09 0.08 1.47 1.49

20052006 0.86 0.07 0.85 1.49

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20062007 0.80 0.06 0.72 1.36

20072008 0.94 0.24 0.92 0.98

20082009 1.7 1.0 1.6 1.1

Chart1:GrossNPAofPSBs.

0

5

10

15

200405 200506 200607 200708 200809

SBI

UBI

BOB

AB

Chart1.2:GrossNPAofPBs.

0

1

2

3

45

6

200405 200506 200607 200708 200809

IndusIndBank

ICICIBank

HDFCBank

AxisBank

Chart1.2:GrossNPAofFBs.

0

1

2

3

45

6

200405 200506 200607 200708 200809

StandardChartered

Bank

HSBCBank

DeutscheBank

Citibank

COMPARISONOFGROSSNPAWITHALLBANKSThegrowingNPAsaffectthehealthofbanks,profitabilityandefficiency. Iterodesthenetworthofthebanks.Financialhealthofbanksand

other financial institutions isseriouslyaffecteddue to NPAs. AlltwelvebanksgrossNPA are takentogether forbetterunderstandingof the

trend.AverageofthesetwelvebanksgrossNPAsinyear200809is1.3aspercentageoftotalassets.Soifwecompareinpublicsectorbanks

thatAB

and

BOB

and

in

private

sector

banks

Axis

bank,

HDFC

bank,

IndusInd

bank

are

below

the

average

of

all

banks.

Deutsche

bank

and

StandardCharteredbankarebelowaverageofallbanks.AverageofgrossNPAsofallbanksinyear200405was1.76;thoughinyear200809it

hasdeclinedbuthas increased incomparisontopreviousyear.AverageofthesefourpublicsectorbanksgrossNPAandthatof fourprivate

banksgrossNPAis1.28whereasthatofforeignbanksis1.35whichishigherascomparedtobothgroupsofbanks.

Chart2.3:GrossNPAofallbanksforyear200809.

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84

0

1

2

3

4

5

6

PSBs PBs FBs

Table2:NetNPAaspercentageoftotalassetsofPSBs.

Year/Bank AB BOB UBI SBI

200405 0.60 0.65 0.95 1.16

200506 0.45 0.46 0.71 0.99

200607 0.65 0.35 0.79 0.93

200708 0.48 0.27 0.56 1.03

200809 0.4 0.2 0.8 1.0

Table2.1NetNPAaspercentageoftotalassetsofPBs.

Year/Bank

AxisBank HDFC

Bank IC IC I

Bank IndusInd

Bank

200405 0.57 0.12 0.90 1.6

200506 0.44 0.21 0.42 1.1

200607 0.36 0.22 0.58 1.3

200708 0.23 0.22 0.87 1.3

200809 0.2 0.3 1.2 0.6

Table2.2NetNPAaspercentageoftotalassetsofFBs.

Year/Bank Citibank DeutscheBank HSBCBank StandardCharteredBank

200405 0.54 0.23 0.60

200506 0.51 0.26 0.82

200607 0.51 0.18 0.73

200708 0.56 0.08 0.23 0.47

200809 1.0 0.3 0.4 0.5

Chart2:

Net

NPA

of

PSBs.

00.5

1

1.5

2

2.5

3

3.5

4

200405 200506 200607 200708 200809

SBI

UBI

BOB

AB

Chart2.1:NetNPAofPBs.

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85

0

0.5

1

1.5

2

2.5

3

3.5

200405 200506 200607 200708 200809

IndusIndBank

ICICIBank

HDFCBank

AxisBank

Chart2.2:NetNPAofFBs.

0

0.5

1

1.5

2

2.5

200405 200506 200607 200708 200809

Standard

Chartered

BankHSBCBank

DeutscheBank

Citibank

COMPARISONOFNETNPAWITHALLBANKSAverageofalltwelvebankstakenforstudyis0.58.InPSBsABandBOBarebelowaverage.AxisBankandHDFCBankarebelowaveragethough

theaverageofthesefourprivatesectorbanksissamethatofaverageofalltwelvebanksthatis0.58.PrivatesectorbanksnetNPAaverageis

0.58

and

in

public

sector

banks

it

is

0.61

and

that

of

foreign

banks

is

0.55.

There

is

little

difference

in

average

of

all

the

three

groups

of

banks.

NetNPAshowsactualburdenofbanks.ICICIbankshowsthehighestNetNPAfigureintheyear200809.AxisBankandBOBshowthelowest.

IndusIndBankshowedthehighestnetNPAfigureintheyear200405.AverageofNetNPAofalltwelvebanksinyear200405was0.65andit

declinedto0.58intheyear200809.TheNetNPAfigurein200809ishigherthanthatofpreviousyear.

Chart2.3:NetNPAsofBanksforyear200809

0

0.5

1

1.5

2

2.5

3

PSBs PBs FBs

PRIORITYANDNONPRIORITYSECTOR

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86

NPAscanbefurtherbifurcatedintoprioritysectorandnonprioritysector.Agriculture,smallscaleindustriesandothersareincludedinpriority

sector.IncaseofForeignBanksprioritysectoralsoincludesexporttrade.

Table3:Sector wiseNPAsofPSBs(asatendMarch2009)

(AmountinRs.Crores)

Bank/Sector Agriculture SmallscaleIndustries Others PrioritySector( 1+2+3) NonPrioritySector

AB 203 185 283 671 389

BOB 225 307 287 820 843

UBI

191

231

295 717 303

SBI 1789 1712 3509 7010 7932

Total 2408 2435 4374 9218 9467

Table3.1: Sector wiseNPAsofPBs(asatendMarch2009).

(AmountinRsCrores)

Bank/Sector Agriculture SmallscaleIndustries Others PrioritySector( 1+2+3) NonPrioritySector

AxisBank 123 9 166 297 519

HDFCBank 101 211 67 380 1604

ICICIBank 874 15 560 1449 8116

IndusIndBank 34 1 64 99 156

Total 1132 236 857 2225 10395

Table3.2: SectorwiseNPAsofFBs(asatendMarch2009).

(AmountinRsCrores)

Bank/Sector

Agriculture

SmallScale

Industries Others Priority

Sector Non

Priority

Sector

Citibank 153 153 1934

DeutscheBank 7 7 237

HSBCBank 140 117 257 1283

StandardCharteredBank 40 84 124 934

Total 180 361 541 4388

Chart3:SectorwiseNPAsofPSBs(asatendMarch2009).

0

2000

4000

6000

8000

10000

12000

14000

16000

AB BOB UBI SBI

Series3

NonPriority

Chart3.1:SectorwiseNPAsofPBs(asatendMarch2009).

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87

Chart2.2:SectorwiseNPAsofFBs(asatendMarch2009).

Inprivate

sector

banks

ICICI

Bank

has

the

highest

NPA

in

both

sector

in

comparison

to

other

private

sector

banks.

Approximately,

65

percent

of

NPAiswithICICIBankwithRs1449croreinprioritysectorandaround78percentinnonprioritysectorwithRs8116crore.Thereismoreof

NPAsinnonprioritysectorthanprioritysector.IncaseofpublicsectorbanksSBIhasthehighestNPAinbothsectorwhileAllahabadbankhas

lowestNPA inpriority sector and UBIhas lowestNPA in nonpriority sector. It isobvious from thetable that publicsector banksgivemore

advancestoprioritysector incomparisontoprivatesectorbanksand foreignbanks.PrivatesectorbankshavemoreofNPAs innonpriority

sector.ForeignbankshavealmostnegligibleNPAs inagriculturesector.HSBCbankhasthehighestpercentage48percent incaseofpriority

sectorwithRs275croreswhereasCitibankhasthehighestNPAsinnonprioritysectorwithRs1934crores.

Table3:SectorwiseNPAsofPSBs,PBs&FBs(fortheyear2008&2009).Sector/Bank PSBs,PBs,FBs

Year 2008 2009 2008 2009 2008 2009

Priority 25,286.67 24,318 3418.53 3640 402 649

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88

Public 298.69 474 .01 75

NonPriority 14163.14 19,251 9557.52 13172 2712 6509

Total 39,748.51 44,042 12,976.0 6 16,887 3114 7155

Comparison of all PSBs, PBs and FBs is done on priority and nonpriority sector NPAs. The figures depict differentiating results. The major

reasonbeingthatPSBshave vast networkof branchesspreadacross the lengthandbreadthofthecountry. PBs andFBsdo notenjoythis

extensivecoverage.ThereishugedifferenceinNPAsofPSBs,PBsandFBs.PSBshasgreaterNPAsinprioritysectorwhereasPBsandFBshave

greaterNPAsinnonprioritysector.

CONCLUSIONANDSUGGESTIONSItcanbeconcludedthatNPAsarenotconfinedtoPSBsalonebutarepresentinprivatebanksandforeignbanksaswell.ThereismoreofNPAs

innonprioritysectorthanprioritysector.ThefiguresofGrossandNetNPAsofPSBshaveimprovedovertheyearsbecauseofrigorouspolicy

initiativesandenforcementofvariouslegalandnonlegalmeasures.SBIamongPSBs,ICICIamongPBs,CitibankamongFBshavetobeargreater

burdenofNPAs.FollowingsuggestionscanbegiventoreducethelevelofNPAs:

Professionalpeopleshouldberecruitedandassociatedatalllevelsofcreditappraisal.TheycanbeCAs,lawyers,MBAs,bankingexpertsetc. Compromiseshouldbeconsideredbetterremedythanrecoverythroughlegalsuits. Propersurveyofdifficultiesofcustomersshouldbemadeandadequateassistanceshouldbeaccordinglyprovided. BanksandfinancialInstitutionstogetherwithCentralGovernmentshouldestablishmorecourtsforquickerremedies. Recoveryagentsshouldbeappointedtocollectondailybasisfromtransportoperators,retailtradersetc. BankbranchesinvarioussectorsshouldbegivenmoreautonomysothattheycantakequickandtimelydecisionsregardingNPAaccounts. Collectionofinterestfromcreditorsshouldbeonmonthlybasisinsteadofquarterlybasis. Bankingstaffshouldbewelltrainedtoproperlymonitorcreditworthinessoftheborrowers. Politicalinterferenceshouldbeeliminatedindisbursementofloansandadvances.

REFERENCES1. Raju D.N.M Evaluation of the Performance of State Bank of India with special reference to NonPerforming Assets (NPAs), Finance India,

IndianInstituteofFinance,Vol.XXIII,No.3,September2009,Pages985989.

2. RaoSuryachandraD.BankingReformsinIndia AnEvaluativeStudyofthePerformanceofCommercialBanks,RegalPublications,NewDelhi,2008,pages.284296.

3. UppalR.KIndianbankingintheGlobalisedWorld,NewCenturyPublications,NewDelhi,2008,pages.192198.4. GulatiSonuetal.BanksCurtailNon PerformingAssets,BankingintheNewMillennium Issue,ChallengesandStrategies inR.K.Uppaland

RimpiKaur(ed.),MahamayaPublishingHouse,NewDelhi,2007,pages.328337.

5. Mohan N.J. Monteiro & Ananthan B.R. NPAs in Public Sector Banks: Causes and Cures An Analysis of Managers Perception, The IndianJournalofCommerce,Vol.60,No.2,AprilJune2007,pages111.

6. SinghSultanBankingSectorReformsinIndia,KanishkaPublishers,NewDelhi,2007,pages.2151.7. Rajaraman I & Vashishta G NonPerforming Loans of Indian Public Sector Banks Some Panel Results, Economic and Political Weekly,

February,2002.

8. Reddy Prashanth K A Comparative Study of NonPerforming Assets in India in the Global contextsimilarities and dissimilarities, remedialmeasures

CYTL

Paper

Contest,

Indian

Institute

of

Management,

October,

2002,

pages

116.

9. Shakunthalamani P. NonPerforming Assets in Banks: Impact and Management in Banking in the New Millennium Issues, Challenges andStrategies,S.Gurusamy(ed.),KanishkaPublishers,NewDelhi,2001,pages.201213.

10. ThambiRaj K. Selwyn An Analysis of NonPerforming Assets (NPAs) with Banks in Banking in the New Millennium Issues, Challenges andStrategies,S.Gurusamy(ed.),KanishkaPublishers,NewDelhi,2001,pages.240246.

11. ReserveBankofIndia,ReportonTrendandProgressofBankinginIndia200809,RBIMumbai.12. ReserveBankofIndia,ReportonTrendandProgressofBankinginIndia200708,RBIMumbai.13. TheEconomicTimes,VariousEditions.

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