CHAPTER – I
NPAs have turned to be a major stumbling block affecting the profitability of Indian banks before 1992,banks did not disclose the bad debts sustained by them and provision made by them fearing that it may have an adverse. Owing to the low levels of profitability, banks owned funds had to be strengthened by repeated infusion of additional capital by the government. The introduction of prudential norms strengthen the banks financial position and enhance transparency is considered as a milestone measure in the financial sector reform. These prudential norms relate to income recognition, asset classification, provisioning for bad and doubtful debts and capital adequacy. An Explorative & Descriptive study was considered to be adequate to achieve the objectives of the study, and the study was conducted in Dhanalakshmi Bank Limited., Kerala on “An analysis of NPA in commercial banks with special reference to Dhanalakshmi Bank Limited”. The general objective of the study was to analyze the NPA level in commercial banks. However the study was conducted with the following specific objectives.. 1. To analyze the NPA level of Dhanalakshmi bank Limited. 2. To study the recovery procedures of Dhanalakshmi Bank Limited. 3. To examine how far the bank has been successful in reducing the NPA level. 4. To suggest measures for efficient management of NPAs. The major limitation of the study was the paucity of time. Even then, maximum care has been taken to arrive at appropriate conclusion. The method adopted for collection of data was personal interview with bank officials using Inventory schedule as a tool for the same, and it was also sourced from the secondary data. After collecting data from the respective sources, analysis & interpretation of data has been made. On analyzing the data, the following findings were arrived at:- • Net advances are an upward trend.
• Net NPAs are also increasing
• staff productivity is increasing but is not reflected the recovery results. Based on the findings, logical conclusions are drawn, and further, suitable suggestions & recommendations are brought out. The entire project report is presented in the form of a report using chapter scheme, developed logically and sequentially from ‘introduction’ to ‘bibliography & references.’
CHAPTER – 2 INTRODUCTION
The Indian has been liberalized and globalize during the last decade or so. It has exposed the Indian financial sector to international competition in fairly significant manner. To cope with the growing competition in the present scenario the Indian banks have embarked on a massive exercise to revamp the system. Despite the overall progress made by the financial system over the years, the operational efficiency of the banking system has been unsatisfactory, characterized by low profitability, high and growing NPAs and relatively low capital base. NPAs have turned out to be a major stumbling factor affecting the profitability of Indian banks. Before 1992,bank did not disclose the bad debts sustained by them and the provision made by them fearing that it may have an adverse impact. The banks used to take income even on NPAs on accrual basis. This helped them to disclose false profits. Owing to low levels of profitability, the banks owned funds had to be strengthened by repeated intention of additional capital by the government. The introduction of prudential norms to strengthen the banks financial position and enhance transparency is considered as a milestone measure in the financial sector reforms. These prudential norms, which relate to income recognition, asset classification, provisioning for bad and doubtful debt and...