Banking Project Report - A Study On Non-Performing Assets Of Bank Of Baroda


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Banking Project Report - A Study On Non-Performing Assets Of Bank Of Baroda

  1. 1. Banking Project Report - A Study On Non-Performing Assets OfBank Of BarodaThis Finance Project report on Banking Industry in India will be useful to MBA Students andconcentrates on Non-Performing Assets, NPA of a leading public sector bank in India. The FinanceDissertation will have data analysis, with charts and graphs and a proper conclusion.Non-performingassets are assets which cease to generate any income for the bank. These have become the majorconcern of banks in India. NPAs have direct impact on net-profit and also on the performance of thebanks. The recognition of income norms for banks also posed a serious concern to commercialbanks.The present article studies the trends in non-performing assets of Indian banks and makes acomparison of public sector banks, old Private sector banks, new private sector banks and foreignbanks. The article further attempts to establish relationship between net-profit and NPAs and totaladvances. The impact of NPAs on net-profit and impact of total advances on NPAs is alsoexamined.This study shows that an asset, including a leased asset, becomes non-performing when itceases to generate income for the bank. R.B.I (2006) A non-performing asset (NPA) is a loan or anadvance where;i) interest and/ or installment of principal remain overdue for a period of more than 90days in respect of a term loan, ii) the account remains out of order in respect of an Overdraft/CashCredit (OD/CC),iii) the bill remains overdue for a period of more than 90 days in the case of billspurchased and discounted,(iv) the installment of principal or interest thereon remains overdue for twocrop seasons for short duration crops,(v) the installment of principal or interest thereon remainsoverdue for one crop season for long duration crops. This Project Report on Banking shows thatbanks should, classify an account as NPA only if the interest charged during any quarter is notserviced fully within 90 days from the end of the quarter.This MBA Project Report provides Objectivesof Studywhich is: âEUR¢ To understand the NPAs sector-wise.âEUR¢ To make a comparative studyof NPAs of public sector, old private sector, new private sector and foreign sector banks.âEUR¢ Tounderstand the relationship between NPAs, net-profit and advances. An account should be treatedas out of order if the outstanding balance remains continuously in excess of the sanctionedlimit/drawing power. In cases where the outstanding balance in the principal operating account is lessthan the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on thedate of Balance Sheet or credits are not enough to cover the interest debited during the same period,these accounts should be treated as out of order.Overdue Any amount due to the bank under anycredit facility is overdue if it is not paid on the due date fixed by the bank. The present Project Reporton Bank of Baroda article studies NPAs sector-wise and makes a comparison between public sector,old private sector, new private sector and foreign sector banks. Finally the article attempts tounderstand the relationship between NPAs and net-profit and total advances.The present study isaimed at analyzing the NPAs of Indian banks. For the purpose of the study data has been collectedfrom secondary source. The main source of information has been RBI reports and bulletins. Thestudy covers five. The data collected is tabulated and present graphically. The study further uses
  2. 2. correlation and regression content