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Analysis of NPA management at Canara Bank

Analysis of NPA management at Canara Bank



Analysis of NPA Management in Commercial Bank

Analysis of NPA Management in Commercial Bank



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    Analysis of NPA management at Canara Bank Analysis of NPA management at Canara Bank Presentation Transcript

    • A PROJECT ONANALYSIS OF NPA MANAGEMENT AT CANARA BANK Submitted By Purushottam Kumar Karna Internal Guide External Guide Prof. Mohammed Arif Pasha HOD,MBA Dept Manager, NPA cell BCE, Bangalore Canara Bank
    • INDUSTRY PROFILE The ancient Banking in India is tracced back in Maurya dynasty (321 to 185 BC) The establishment of modern type of bank in India dates back to 18th century, called as General Bank of India.Milestones: 1949 : Enactment of Banking Regulation Act. 1955 : Nationalisation of State Bank of India. 1969 : Nationalisation of 14 major Banks. 1980 : Nationalisation of seven banks with deposits over 200 Crores. 1990 : Liberalization of Banks 2011 : RBI decided to issue new licenses for more Pvt Banks.
    • COMPANY PROFILE Established in 1906 in Mangalore as Canara Hindu Permanent Fund by Visionary Shree A.S.R Pai through 2000 shares of capital having Rs.50 each. Nationalized with other 14 major bank in 1969. In 1995-96 First bank with ISO 9002 in India. In 2004-05 Complete Computerized Bank In 2010-11 Bank scored 5lakh crore benchmark of business and earned SIFI status
    • NATURE OF BUSINESS CARRIEDCommercial Banking & Financial Services: Personal BankingCorporate BankingNRI BankingInternet BankingPriority & SME BankingMutual Fund BusinessCanBank Venture Capital Factoring Subsidiary
    • VISION, MISSION & QUALITY POLICY VISION STATEMENT: “To emerge as a „Best Practices Bank‟ by pursuing global benchmarks in profitability, operational efficiency, asset quality, risk management and expanding the global reach”. MISSION STATEMENT: “To provide quality banking services with enhanced customer orientation, higher value creation for stakeholders and to continue as a responsive corporate social citizen by effectively blending commercial pursuits with social banking”. CORPORATE OBJECTIVE : E- Efficiency. P- Profitability and Productivity. O- Organization Effectiveness. C- Customers centric H- Hi Tech Banking
    • PRODUCT/SERVICE PROFILEPersonal Banking  CASA products  Loan Products  Mutual Funds Corporate Banking  Deposit, Credit & OD  Merchant Banking services (IPO)  Syndication Services NRI Banking  Remittance FacilitiesPriority Banking  SME & Social/Agri Banking Asset Management Retail Banking
    • AREA OF OPERATION GLOBAL/ NATIONAL/DOMESTICDomestic/National Operation: Network of 3046 Branch Nationwide over 25 states/4 Union territories HO : Bangalore Circle Office: 33 Global Operation: Concept of Financial Supermarket London, Shanghai, HongKong, Doha, Dubai, Moscow as financial subsidiary and foreign branch.
    • OWNERSHIP PATTERN No. of Shares 15% 1 Govt of India 5% 2 Banks & FI1% 0% 1% 3 Mutual Funds 4 Bodies Corporate 10% 5 NRIs/OCBs 6 Resident 68% Individuals/HUF/Trust 7 Foreign Institutional Investors
    • COMPETITOR‟S INFORMATIONMajor competitors from Public sector Banks: - SBI and its Associates Bank Of Baroda Punjab National Bank Bank Of India IDBI Bank Major Competitors from Private Sector Banks:- ICICI Bank HDFC Bank AXIS BankMajor Competitors from Foreign sector Banks:- Standard Chartered Bank HSBC Bank Citi Bank
    • WORKFLOW MODEL OF BANK Maintain CRR Canara Bank Reserve Bank of India Saving & Mobilize LoanDeposit Money & Credit products Deposit or Saving Loan A/c Holders A/c Holders
    • MCKINSEY‟S 7 S FRAMEWORKCanara Bank „s 7 Model:
    • SWOT ANALYSISInternal Analysis External Analysis OPPORTUNITY STRENGTH 1. Mutual Fund 1. Full Core Banking 2.Customer centric approach 2. Pan-India Branches 3. Loan Mobilization 3. Robust Asset Quality WEAKNESS THREATS 1.Traditional staffing skill 1. Pvt Sector Banks 2. 4th rank in PSB Banks 2.Innovative Banking 3. Weak Research team 3. Competitive market
    • GENERAL INTRODUCTION OF PROJECT RESEARCHProblem Statement: “ To access & analyze Credit Risk Management Policyof Bank through NPA Analysis in post Credit CrisisWorld ”Objective of Study: - To Analyze statistical correlation between differentfactors of NPA measures.Scope of Study: - Statistical Analysis of NPA factors in Canara banksthrough annual reports data provided from 2007-2011. Methodology: Analytical Research - Statistical Analysis using MS Excel 2007 Limitation of Study: - The NPA information of bank is top secret unless itis reported in financial statements.
    • FINDINGS :1 1.2 1 0.8 0.6 PSB Net NPA ratio Average Net NPA ratio of Canara 0.4 0.2 0 2011 2010 2009 2008 2007 Correlation Coefficient -0.3 (loose correlation) Correlation between PSB Average NPA ratio and CanaraBank net NPA ratio
    • FINDINGS:2 4500 4000 3500 3000 2500 Net NPA (in Crores) 2000 Net Profit(In Crores) 1500 1000 500 0 2011 2010 2009 2008 2007 Correlation Coefficient 0.98 (strong correlation) Correlation between Net Profit Earned and Canara Banknet NPA
    • FINDINGS:3 Capital Adequacy Ratio 16 15.5 15.38 15 14.5 14.1 14 Capital Adequacy Ratio 13.5 13.43 13.5 13.25 13 12.5 12 2011 2010 2009 2008 2007Comfortable CAR as per Basel II calculationMandated CAR : 9%
    • SUGGESTION & RECOMMENDATION1) The credit generation procedure, monitoring creditaccounts and treatment of substandard assets must bedealt at routinely basis to further movement of accountinto NPA.2) It is also wise for the banks to carryout specialinvestigative audit of all financial and businesstransactions and books of accounts of the Retail &Corporate client when there is possibility of thediversion of the funds and mismanagement.3) It is commendable to monitor and supervisestressful assets and initiate proper support to not todeteriorate further NPA trench.4) The modern practice of NPA management likeCDR, CDS and Recovery Tribunal proceedings can beadopted thoroughly to reduce NPA more aggressively.
    • CONCLUSION The Credit management Practice is standard as per international norm in Bank. The Risk appetite of Bank is moderate along with its high growth offensive marketing strategy and NPA quality measurement. Most of the NPA factors contributed in bank is from Macro economic reasons and particular year 2009 FY is worst case in NPA management point of view. The profitability of bank is not impacted by NPA. The competitive NPA management among peers PSB is satisfactory The CAR is adequately comfortable.
    • LEARNING EXPERIENCE First 5 Weeks Research on Banking Industry Identification of Indian Financial System Banking Company Preview Canara Bank‟s profile study Second 5 Weeks: Problem Study in Canara Bank for research purpose NPA topic Literature study Statistical Analysis & Modeling Business interpretation & Conclusion