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 adopted to achieve the objectives of the study, and the study was conducted in OBC, “Non Performing Assets”. The general objective of the study was to analyze the NPA level in OBC Bank. However the study was conducted with the following specific objectives:- * To analyze the NPA level of Oriental Bank of Commerce.
* To study the recovery procedures of Oriental Bank of Commerce. * To examine how far the bank has been successful in reducing the NPA level. * 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 & Observations. 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.
* 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.’
A strong banking sector is important for flourishing economy. One of the most important and major roles played by banking sector is that of lending business. It is generally encouraged because it has the effect of funds being transferred from the system to productive purposes, which also results into economic growth. As there are pros and cons of everything, the same is with lending business that carries credit risk, which arises from the failure of borrower to fulfill its contractual obligations either during the course of a transaction or on a future obligation. The failure of the banking sector may have an adverse impact on other sectors. Non- performing assets are one of the major concerns for banks in India. NPAs reflect the performance of banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. The NPA growth involves the necessity of provisions, which reduces the overall profits and shareholders’ value. The issue of Non Performing Assets has been discussed at length for financial system all over the world. The problem of NPAs is not only affecting the banks but also the whole economy. In fact high level of NPAs in Indian banks is nothing but a reflection of the state of health of the industry and trade. This project deals with understanding the concept of NPAs, its magnitude and major causes for an account becoming non-performing, projection of NPAs over next years in banks and concluding remarks. The magnitude of NPAs have a direct impact on Banks profitability legally they are not allowed to book income on such accounts and at the same time banks are forced to make provisions on such assets as...