Non Performing Assets in Banks - Causes and Management - with a check list for Bank Branch Managers/Lending/Credit Managers/Audit Managers/Special Accounts Department Managers
A powerful presentation on non performing assets which very much influencial when presented before others. Being a law student, I myself created the presentation and presented before the elite authorities which impressed them to a larger extent.
Non Performing Assets in Banks - Causes and Management - with a check list for Bank Branch Managers/Lending/Credit Managers/Audit Managers/Special Accounts Department Managers
A powerful presentation on non performing assets which very much influencial when presented before others. Being a law student, I myself created the presentation and presented before the elite authorities which impressed them to a larger extent.
A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of Bond finance principal has remained 'past due' for a specified period of time. NPA is used by financial institutions that refer to loans that are in jeopardy of default.
NPA - Non Performing Assets by Meka SantoshSantosh Meka
NPA which is gobal problem for the banks with the borrower who they not pay money back to the banks with the given period of time.The silde have been describing toward INDIAN bank. More over it includes the impact, problem, solution and action taken by RBI and Govt of India to solve the issue of NPA.
NPAs and their management in banks in IndiaJyoti Sharma
NPAs are a growing concern in banks. This ppt deals with concept of NPAs, RBI's prudential guidelines regarding income recognition, asset classification and provisioning, tools for NPA management available with banks
A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of Bond finance principal has remained 'past due' for a specified period of time. NPA is used by financial institutions that refer to loans that are in jeopardy of default.
NPA - Non Performing Assets by Meka SantoshSantosh Meka
NPA which is gobal problem for the banks with the borrower who they not pay money back to the banks with the given period of time.The silde have been describing toward INDIAN bank. More over it includes the impact, problem, solution and action taken by RBI and Govt of India to solve the issue of NPA.
NPAs and their management in banks in IndiaJyoti Sharma
NPAs are a growing concern in banks. This ppt deals with concept of NPAs, RBI's prudential guidelines regarding income recognition, asset classification and provisioning, tools for NPA management available with banks
A study on understanding the concept of demonetization with reference to MBA ...Syed Valiullah Bakhtiyari
This research is fully based on primary data and it has been collected first hand by the researcher itself, since the respondents were students pursuing master's in business administration it becomes very interesting to know the new age jargon of demonetization.
A SHORT AND GENERAL PPT COVERING ASPECTS LIKE REACTIONS OF PEOPLE,IMPACTS OF DEMONETISATION:POSITIVE AND NEGATIVE,EFFECTS ON 3 SECTORS AND EFFECT ON THE INDIAN ECONOMY. ALL THE BEST!!!!!
Today the Indian banking system has undergone significant transformation following financial sector reforms, adopting international best practices. Several prudential, payment, integrating and provisioning norms have been introduced, and these are pressurizing banks to improve efficiency and trim down NPAs to improve the financial health in the banking system. It is among the best in the world because Indian banks are favourable on growth, asset quality and profitability; RBI and Government have made some notable changes in policies and regulation to strengthen the sector. NPA involves the necessity of provisions, any increase in which bring down the overall profitability of banks; is the indicator of banking health in a country.
In this project we tried to forecast the NPA ratio of the entire bank for year 2011-2012, from the data of previous 10 year NPA ratio that is from 2001-2011. And after forecasting the NPA with the help of regression method we compare the forecasted data with the actual data.
WNS’ commercial banking solutions coupled with cutting-edge transformational solutions enable superior customer experience & cost-effective commercial banking operations.
Get more details on - https://s3.wns.com/S3_5/Documents/Articles/PDFFiles/7064/274/3_Step_Changes_That_Transform_Commercial_Credit_Appraisal.pdf
Credit Risk and Bank Performance in Nigeriaiosrjce
This study investigates the impact of credit risk on banks’ performance in Nigeria. A panel
estimation of six banks from 2000 to 2013 was done using the random effect model framework. Our findings
show that credit risk is negatively and significantly related to bank performance, measured by return on assets
(ROA). This suggests that an increased exposure to credit risk reduces bank profitability. We also found that
total loan has a positive and significant impact on bank performance. Therefore, to stem the cyclical nature of
non-performing loans and increase their profits, the banks should adopt an aggressive deposit mobilization to
increase credit availability and develop a reliable credit risk management strategy with adequate punishment
for loan payment defaults
Reshaping the nigerian financial services sectorEneni Oduwole
This presentation highlights how effective risk management has aided the restructuring of the financial services sector, and thereby allowing for continuous growth in the economy
The Bond Market, ILFS, ZEE and DHFL Crisis at TC2019Deepak Shenoy
Deepak Shenoy of Capitalmind.in presents at Traders Carnival TC2019 about the IL&FS Crisis, what's happening with ZEE, the issue at DHFL and a bond market primer.
A very basic run-through of the concepts around using quantitative strategies with fundamentals. Presented in a Quantinsti webinar on 21 Feb 2017 by Deepak Shenoy at Capitalmind.
Anil Ambani's Lawyers Send Legal Notice to Deepak ShenoyDeepak Shenoy
Deepak Shenoy received this letter on August 02, 2014 on email.
It was in response to a tweet about how Anil Ambani was to have been paid money for royalty by Reliance Power among others, for the ADAG brand.
The assertion is a fact, and has been seen in the Reliance Power IPO document.
SBI Life refuses to pay the insurance to Kavita Sharma, an aged widow, after her husband died. Said they returned the premium, but they did that two years after his death. Dragged the court case for six years.
Sun Pharma - Ranbaxy Merger PresentationDeepak Shenoy
SunPharma and Ranbaxy merge in 2014 to create India's largest and the world's fifth largest pharma company. The merger, which is all stock, will give Ranbaxy shareholders 0.8 Sun Pharma shares for each share they own.
Onmobile has an open offer from a promoter who will buy 10% for Rs. 47 cr. ($8 million) in February 2014. This is NOT a buyback but one promoter entity buying.
Deepak Shenoy presents at the Lean Startup Machine in Bangalore, April 2013. The presentation couldn't be completed on schedule, unfortunately. The slides are here.
Read the [long] article that explains these slides in Five Myths of Being a Financially 'Lean' Startup (http://capitalmind.in/2013/04/five-myths-of-being-a-financially-lean-startup/)
Please connect with deepakshenoy [at] gmail if you have any questions or comments.
Financial market and economic data: The Fifth ElephantDeepak Shenoy
Different kinds of visualizations of financial data, both stock market and economic. Presented at the Fifth Elephant,a conference on Data in Bangalore on July 28, 2012.
what is the best method to sell pi coins in 2024DOT TECH
The best way to sell your pi coins safely is trading with an exchange..but since pi is not launched in any exchange, and second option is through a VERIFIED pi merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and pioneers and resell them to Investors looking forward to hold massive amounts before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade pi coins with.
@Pi_vendor_247
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
Resume
• Real GDP growth slowed down due to problems with access to electricity caused by the destruction of manoeuvrable electricity generation by Russian drones and missiles.
• Exports and imports continued growing due to better logistics through the Ukrainian sea corridor and road. Polish farmers and drivers stopped blocking borders at the end of April.
• In April, both the Tax and Customs Services over-executed the revenue plan. Moreover, the NBU transferred twice the planned profit to the budget.
• The European side approved the Ukraine Plan, which the government adopted to determine indicators for the Ukraine Facility. That approval will allow Ukraine to receive a EUR 1.9 bn loan from the EU in May. At the same time, the EU provided Ukraine with a EUR 1.5 bn loan in April, as the government fulfilled five indicators under the Ukraine Plan.
• The USA has finally approved an aid package for Ukraine, which includes USD 7.8 bn of budget support; however, the conditions and timing of the assistance are still unknown.
• As in March, annual consumer inflation amounted to 3.2% yoy in April.
• At the April monetary policy meeting, the NBU again reduced the key policy rate from 14.5% to 13.5% per annum.
• Over the past four weeks, the hryvnia exchange rate has stabilized in the UAH 39-40 per USD range.
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
when will pi network coin be available on crypto exchange.DOT TECH
There is no set date for when Pi coins will enter the market.
However, the developers are working hard to get them released as soon as possible.
Once they are available, users will be able to exchange other cryptocurrencies for Pi coins on designated exchanges.
But for now the only way to sell your pi coins is through verified pi vendor.
Here is the telegram contact of my personal pi vendor
@Pi_vendor_247
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
Latino Buying Power - May 2024 Presentation for Latino CaucusDanay Escanaverino
Unlock the potential of Latino Buying Power with this in-depth SlideShare presentation. Explore how the Latino consumer market is transforming the American economy, driven by their significant buying power, entrepreneurial contributions, and growing influence across various sectors.
**Key Sections Covered:**
1. **Economic Impact:** Understand the profound economic impact of Latino consumers on the U.S. economy. Discover how their increasing purchasing power is fueling growth in key industries and contributing to national economic prosperity.
2. **Buying Power:** Dive into detailed analyses of Latino buying power, including its growth trends, key drivers, and projections for the future. Learn how this influential group’s spending habits are shaping market dynamics and creating opportunities for businesses.
3. **Entrepreneurial Contributions:** Explore the entrepreneurial spirit within the Latino community. Examine how Latino-owned businesses are thriving and contributing to job creation, innovation, and economic diversification.
4. **Workforce Statistics:** Gain insights into the role of Latino workers in the American labor market. Review statistics on employment rates, occupational distribution, and the economic contributions of Latino professionals across various industries.
5. **Media Consumption:** Understand the media consumption habits of Latino audiences. Discover their preferences for digital platforms, television, radio, and social media. Learn how these consumption patterns are influencing advertising strategies and media content.
6. **Education:** Examine the educational achievements and challenges within the Latino community. Review statistics on enrollment, graduation rates, and fields of study. Understand the implications of education on economic mobility and workforce readiness.
7. **Home Ownership:** Explore trends in Latino home ownership. Understand the factors driving home buying decisions, the challenges faced by Latino homeowners, and the impact of home ownership on community stability and economic growth.
This SlideShare provides valuable insights for marketers, business owners, policymakers, and anyone interested in the economic influence of the Latino community. By understanding the various facets of Latino buying power, you can effectively engage with this dynamic and growing market segment.
Equip yourself with the knowledge to leverage Latino buying power, tap into their entrepreneurial spirit, and connect with their unique cultural and consumer preferences. Drive your business success by embracing the economic potential of Latino consumers.
**Keywords:** Latino buying power, economic impact, entrepreneurial contributions, workforce statistics, media consumption, education, home ownership, Latino market, Hispanic buying power, Latino purchasing power.
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how can I sell pi coins after successfully completing KYC
KC Chakrabarty on NPAs in India
1. BANCON 2013
Two decades of credit
management in banks:
Looking back and moving ahead
K.C. Chakrabarty
Deputy Governor
Reserve Bank of India
2. Introduction
Business of banking is business of intermediation
Credit risk is integral to banking business
When banking was simple
Lending decisions - made on impressionistic basis
Credit risk management – straightforward
Information requirements – minimal
As
banking
sophisticate
became
diverse,
complex,
Risks increased, became transmitive and contagious
But, credit risk management – lagged behind
And, information systems – remained primitive and did
not capture granular data correctly
3. Objectives
Examine how Indian banks have dealt with credit risk
over the last two decades
Evolution of regulatory framework
Analyse trends in asset quality of Indian banks
Trends in gross and net NPAs
Trends in slippages, write offs and recoveries
Trends in restructuring
Dwell on some facets that have a bearing on the asset
quality of banks
Risk management and primitive information systems
GDP growth trends
Size / segment analysis of impaired assets
General governance and management structure
Credit appraisal and monitoring standards
Way forward for the regulators, policy makers, banks
and bank customers
5. Prudential norms for NPAs
1985
First-ever system of NPA classification - ‘Health Code’ system
Classification of advances into eight categories ranging
from 1 (Satisfactory) to 8 (Bad and Doubtful Debts)
1992
Prudential norms on income recognition, asset classification
and provisioning introduced
Restructuring guidelines introduced
Assets, where the terms of the loan agreement regarding
interest and principal is renegotiated or rescheduled after
commencement of production to be classified as substandard
2001
90 day norm for NPAs introduced (effective from March 31,
2004)
specified asset classification treatment of restructured
accounts tightened
6. NPA trends – Reflecting regulatory initiatives
NPAs rose when prudential regulations introduced - reduced
thereafter as regulatory initiatives facilitated improved credit risk
management by banks
Pace of introduction / tightening of regulatory reforms slowed after
2001
Regulatory norms were not further tightened during the “good” pre-crisis
years
Reflected in poor credit standards and increased delinquencies
Provisioning levels remained low for the Indian banking sector
Norms with regard to floating provisions changed
Provisioning coverage ratio was introduced but relaxed thereafter
Dynamic provisioning coverage yet to be introduced
Mere tweaking and flip flop approach to Prudential norms
Restructuring increased as regulatory requirements were relaxed,
especially in the post crisis years
One time special dispensation for asset classification of restructured
accounts provided to deal with the impact of the global financial crisis
8. Trends in gross and net NPAs
Early 1990s
NPA ratios rose
Immediate impact of
prudential norms
Thereafter, the NPA ratios
declined
Improved risk management
Increased write offs
Rising credit growth / robust
economic growth
Abundant liquidity conditions
Increased restructuring
GNPA
NNPAs
1997-2001
12.8
8.4
2001-2005
8.5
4.2
2005-2009
In recent years, NPA ratios
have been rising, though on
an average, the ratios are
not higher
Average NPA in %
3.1
1.2
2009-2013
2.6
1.2
Mar 2013
3.6
1.9
Sep 2013
4.2
2.2
9. Divergent bank group wise trends
1996-2003 – wide variation
between NPA ratio of PSBs
and other bank groups
2003-06 - NPA ratios of all
bank groups moved in
tandem
2007-09 – NPA ratios begin to
decouple
After 2009, gap between
PSBs and other bank groups
started rising
10. PSBs – growing asset quality concerns
PSBs share a disproportionate and increasing
burden of NPAs – especially in recent years
11. Looking beyond the veil of headline numbers
Gross and net NPAs numbers have limitations!
In the 1990s, only data about gross and net NPAs were
available
Subsequently, data on flow of NPAs (fresh accretions and
recoveries) collected, followed by data on restructuring,
which allowed better understanding of the real problem of
credit management in the banks
A more detailed understanding of trends in asset quality of
banks required collection and analysis of granular data about
various aspects of NPA management viz. Slippages, Write offs
and Recoveries – Segment wise and activity wise
Such data has been collected only in recent years(since
2009), largely due to regulatory impetus
The current analysis is an attempt to examine trends in asset
quality based on this detailed information
12. NPA movement over the last decade
Increasing slippages and write offs since the crisis years
New accretion to NPAs exceeds reduction in NPAs post
crisis
All amount in Rs crore
2001-2013
60,434
2001-2007
60,434
2007-2013
50,513
New Accretion to NPAs
during the period
629,058
161,406
494,836
Reduction in NPAs
during the period
492,903
169,889
350,332
Due to upgradation
110,918
24,003
90,887
Due to write-off
204,512
74,838
141,295
Due to actual
recovery
177,473
71,049
118,149
NPAs at Beginning of the
period
NPAs at End of the
period
193,200
50,513
193,200
13. Slippages … Trends
Slippages – better metric to assess credit
management
Slippages & net slippages
Showed a declining trend in the early 2000s;
started rising since 2006-07
14. Recovery efforts deteriorating
Extent to which banks able to reduce NPAs through
recovery efforts deteriorating
evidenced by increasing ratio of slippages to recovery
and upgradation
Slippage to (Recovery +
Upgradation) Ratio
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
190.5
167.1
129.5
125.4
173.2
205.2
221.0
264.1
217.0
255.9
257.0
Average Slippage to
(Recovery + Upgradation) Ratio
PSB
OPB
NPB
FB
2001-13
191.1
191.3
452.8 438.6
2001-07
211.3
179.6
376.6 350.6
2007-13
220.6
202.7
418.7 430.3
15. Recovery & write offs – associated moral hazard
Write offs contributing significantly in reduction in NPAs
Reducing incentives to improve recovery efforts
Slippages exceeding reduction in NPAs especially post crisis
The trends indicate weaknesses in credit as well as recovery management
Upgradation as
% of reduction
in NPAs
Mar-01
Mar-02
Mar-03
Mar-04
Mar-05
Mar-06
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
Write off as %
of reduction in
NPAs
Recovery as %
of reduction in
NPAs
12.6
12.0
16.0
12.3
15.2
15.2
14.5
17.4
23.8
21.3
24.2
31.7
33.1
39.3
49.4
50.7
48.3
39.0
40.2
42.5
40.7
39.6
50.2
42.4
33.4
37.8
48.1
38.7
33.4
39.4
45.8
44.6
42.9
41.8
36.6
28.4
33.4
34.9
29.2
Upgradation as a % of
slippages
2001-13
17.6
2001-07
14.9
2007-13
18.4
Reduction as a % of
slippages
2001-13
78.4
2001-07
105.3
2007-13
70.8
16. Divergent bank group wise trends - slippages
In the aftermath of the
crisis, slippage ratios rose,
especially for FBs and
NPBs
FBs and NPBs, though
quickly arrested
deterioration in asset
quality post-crisis through
improved credit risk
management
Slippage
Ratio
PSB
OPB
NPB
FB
Mar-07
1.8
1.8
2.0
1.5
Mar-08
1.7
1.4
2.1
2.1
Mar-09
1.8
1.9
3.0
5.5
Mar-10
2.0
2.2
2.0
5.5
Mar-11
2.2
1.7
1.3
2.2
Mar-12
2.8
1.5
1.1
2.3
Mar-13
3.1
1.8
1.2
1.8
In recent years, the ratio
rose sharply for PSBs
OPB
NPB
FB
2001-13
2.7
2.6
3.9
2.8
2001-07
Average
slippage ratio PSB
3.2
3.3
5.7
2.4
2007-13
2.2
1.8
1.8
3.0
Slippage ratio = fresh accretion to NPAs during the
year to standard advances at the beginning of the
17. Divergent bank group wise trends – net slippages
Recovery performance also varied across banks as
revealed by trends in net slippages
Net Slippage
Ratio
Mar-07
Mar-08
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
PSB
OPB
NPB
FB
0.6
0.7
0.7
1.2
1.2
1.8
1.9
0.5
0.5
1.0
1.1
0.7
0.6
0.8
1.5
1.8
2.4
1.5
0.6
0.5
0.6
1.0
1.6
4.7
3.9
0.6
1.5
1.1
Average net PSB
slippage ratio
OPB
NPB
FB
2001-13
1.3
1.3
2.5
1.8
2001-07
1.3
1.6
3.6
1.4
2007-13
1.2
0.8
1.3
2.1
Net slippage ratio is slippage ratio net of recoveries
18. Divergent bank group wise trends –
slippages and fresh restructured accounts
The
bank group wise trends in slippages are
further re-enforced when the trends in
slippages and fresh restructuring are
examined
Slippages + fresh restructured ratio
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
PSB
5.2
5.6
3.2
6.5
7.1
OPB
5.2
4.0
2.7
2.8
3.4
NPB
3.9
4.0
1.5
1.9
1.8
FB
6.8
6.8
2.3
2.3
1.8
19. Conclusions ..
Standards of credit and recovery administration is
inefficient and poor as is reflected from the fact that
upgradation as a % of slippage is very low – only less
than 20 % of accounts have been upgraded
Recoveries are very less- A major part of reduction is
through write-off
Even during 2001-07, recoveries and upgradation were
not as good-things have considerably deteriorated
thereafter
Gross NPA in itself not a problem but in conjunction
with restructured advances they have emerged as a
major issue
20. Restructured Accounts … Trends
Growth in restructured accounts
mixed trend in early 2000s
sharp uptick in 2008 / 2009 due to the one time regulatory dispensation
Continued high growth rate thereafter
21. Restructured Accounts … Use and Misuse
Forbearance a necessity, especially for viable accounts
facing temporary difficulties
But, increasing evidence of misuse of facility for “evergreening” of problem accounts by banks
Restructuring of unviable units
Deserving & viable units especially for small borrowers
get overlooked
Promoters contribution to equity not ensured
Restructuring increasingly used as a tool of NPA management
by banks
(GNPA +
All Banks
(%)
Mar09
GNPA
Ratio
2.4
(GNPA +
Rest. Std.
Adv) to
Total Adv.
5.1
Mar Mar- Mar- Mar
-10
11
12
-13
Rest. Std.
Adv) to
Total Adv.
MarMar-10 Mar-11 Mar-12 Mar-13
09
6.7
2.3
5.8
2.9
7.6
3.4
9.2
PSBs
5.1
7.3
6.6
8.9
11.1
OPBs
2.5
5.7
5.9
4.9
5.3
5.9
NPBs
5.5
4.8
3.2
3.2
3.1
FBs
5.0
4.7
2.7
2.8
3.1
23. Divergent bank group wise trends in
restructuring and write -off
Asset quality deteriorates further if restructured accounts and write
offs are included, especially in the case of PSBs
Banks which are more aggressive in identifying NPAs appear to be
able to manage them better
Impaired Assets ratio
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
PSB
6.8
8.8
8.1
10.0
12.1
OPB
6.8
7.3
6.1
6.3
6.8
NPB
6.6
7.3
5.5
5.4
5.3
FB
6.5
9.5
7.2
6.6
6.4
Impaired Assets ratio = (GNPA + Restructured Standard Advances +Cumulative write off) to (Total Advances +
Cumulative write off)
24. Conclusions …..
Only less then 10% of the total amount written off
(including the Technical Write-off ) is recovered
The amount of restructuring and write –offs
distorts inter-segment comparison of credit
quality
Technical write –off creates moral hazard
Write offs creates a dent in overall recovery
efforts
25. Segment wise NPA Trends
Deterioration in asset quality highest for industries’ segment
Though banks devote fewer resources to the administration
of small credits vis-à-vis larger credits
Within industries segment - deterioration driven by medium
and large enterprises (50% share in NPAs)
Impaired Assets ratio
in %
Micro+Small
Medium+Large
Mar-09
Mar-10
Mar-11
Mar-12
Mar-13
10.7
10.6
9.4
9.7
10.6
7.8
9.4
8.0
11.2
14.8
26. Infrastructure finance – significantly affected
Infrastructure projects – strain on
banks
regulatory, administrative and
legal constraints
Banks’
took
inadequate
cognizance of the need for
contingency planning for large
projects in their appraisal
absence or insufficiency of user
charges
Impaired Assets ratio
In %
Mining
Iron and Steel
Textiles
Infrastructure
Real Estate
Aviation
Mar-09
Mar-13
4
8
14
5
1
1
9
15
23
16
2
27
Increase in NPA by adding restructuring & write off - 2009 vs 2013
27. Large ticket advances – greater share in
restructured accounts
Restructuring – provided primarily to large corporates
medium and large accounts make up over 90 per
cent of restructured accounts
larger ticket accounts hold major share in CDR
in %
Share in total
bank credit
Share in total
bank NPA
Share in total
bank
restructuring
Mar-09
Mar-10
Mar-11
Mar-12 Mar-13
Micro+Small
10.1
11.4
12.0
10.8
10.7
Medium+Large
39.9
42.9
45.0
46.8
48.4
Micro+Small
16.1
20.4
21.1
17.5
17.2
Medium+Large
23.8
28.7
27.5
37.7
48.8
Micro+Small
12.2
7.7
7.7
4.3
3.4
Medium+Large
77.4
69.6
71.1
83.0
90.8
28. Asset quality worse for Directed Lending –
A myth
General belief is that directed lending has contributed
to rising NPAs
GNPA ratio higher for priority sector than non-priority
sector
However, considering restructured accounts and write
offs, asset quality worse for the non-priority sector
Priority sector
Non Priority sector
29. Study Conclusions & Other Issues :
Why high NPA and such poor
state of Credit Management?
30. Primitive Information Systems
Improvements in information systems were
not coincident with increased size of asset
portfolio, increasing complexities in credit
management
Banks ability to manage the quality of their
asset portfolio remained weak given
The lack of granular data on slippages, early
indications of deterioration in asset quality,
segment wise, trends, etc.
Banks failed in identifying / arresting the early
pre-crisis trends – from 2005-06 - in asset quality
deterioration
31. GDP slowdown leading to increased NPAs!
Recent decline in asset quality coincided with
deceleration in GDP growth
32. Higher NPAs only a result of GDP slowdown?
Beginnings of deterioration in asset quality started ahead of
slowdown in economic growth
Growth rate of GNPAs started rising before the crisis even as
the pace of slippages turned sharply positive in 2006-07
33. Asset quality of PSBs – Economic downturn
or sub-optimal credit management?
Recent increase in NPAs not reflected across all
bank groups
Though economic downturn faced by all banks
Early threats to asset quality - swiftly and
effectively managed by private sector and
foreign banks
PSBs suffer from structural deficiencies related to
the
management
and
governance
arrangements
Reflected in lacunae in credit management
Pre-dates the crisis, but not dealt with on time,
unlike in the case of the FBs and NPBs
34. Lax Credit Management
Deficiencies
in
credit
management crept in during
the pre-crisis “good years”
In general, banks with high credit
growth in 2004-08 ended up with
higher NPA growth in 2008-13
The appraisal process failed to
differentiate between promoter’s
debt and equity
Promoters equity contribution
declined / leverage higher
Credit
monitoring
neglected
was
Recovery efforts slowed
Legal infrastructure for recovery
remained non-supportive
Restructuring became rampant
PSB
OPB
NPB
FB
35. Increasing frauds – or are they business
failures?
Increasing
incidence
of
frauds,
especially
large
value frauds in recent years
Over 64 % of fraud cases are
advances related – over
70% in case of large value
frauds (over Rs. 50 crore)
Poor appraisal and
absence of equity has led to
larger no. of advance
related frauds especially
through diversion
Moral hazard associated
with identifying business
failures as frauds
Lacunae in credit
appraisal not identified
Fixation of Staff
accountability a
casualty
Advance Related Frauds (>Rs. 1cr)
2010-11
2011-12
2012-13
Amt
Bank
Amt
No.
No.
Group
(in cr.)
(in
cr.)
Cumulative
(end Mar13)
Amt
No.
(in
cr.)
No.
Amt
(in cr.)
PSBs
201
1820
228 2961 309 6078 1792 14577
OPB
20
289
14
63
12
49
149
767
NPB
18
234
12
75
24
67
363
1068
FB
3
33
19
83
4
16
456
277
Grand
242
Total
2376
273 3183 349 6212 2760 16690
36. Credit appraisal suffered…(1)
Poor Credit appraisal at the time of sanctioning as also at the time of
restruturing
Significant increase in indebtedness of large business groups
Sample of 10 large corporate groups - credit more than doubled between 2007 and
2013 even while overall debt rose 6 times
Credit growth concentrated in segments with higher level of impairment
Lending elevated in several sectors where impairments were higher than
average
CAGR of
credit
20092012
Impaired
Assets ratio
(March
2013)
Iron and Steel
25
15
Infrastructure
33
16
Power
41
18
Telecom
Aggregate
banking sector
28
16
19
11
Sectors
Source : Credit Suisse Research
37. Credit appraisal suffered…(2)
Indian corporates - accessing international markets
to raise capital
Risk from un-hedged exposures
Risk from increase in interest rates
Impact could spill-over to lenders
Project risks not taken due cognizance of
Contingency planning for large projects
Restructuring extended to large corporates that
faced problems of over-leverage and inadequate
profitability
Companies with dwindling repayment capacity to
repay debt - raising more and more debt from banks
ability of corporates to service debt was falling
exposure of companies to interest rate risk was rising
38. Conclusions …..
High credit growth in select sectors has led to decline in
credit quality in subsequent periods
High incidence of advance related frauds are an
outcome of deficient credit appraisal standards
Level of Leverage of corporate borrowers, credit
growth, diversion of funds, sub standard assets and
fraud cases are highly correlated. They are first order
derivative of improper credit and recovery
management
39. Summing up…. (1)
Current NPA levels - not alarming though could pose
concern if current trends persist
All Banks
Year
PSBs
Old Pvt. Sec. New Pvt. Sec
Foreign Banks
Banks
Banks
GNPA NNPA GNPA NNPA GNPA NNPA GNPA NNPA GNPA NNPA
Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio Ratio
Mar 94
19.07 13.71 21.11 15.44
6.93
3.88
-
-
1.46
-0.65
Mar-95
15.31 10.46 17.12 11.98
7.35
4.12
2.21
0.93
1.62
-0.91
Mar-97
14.33
9.50
16.44 11.15
8.29
4.66
2.92
2.51
3.57
1.02
Mar-99
13.34
8.99
14.63 10.17 13.02
7.82
4.55
3.52
5.00
0.86
Mar-01
11.14
6.28
11.99
6.97
11.86
6.71
5.40
3.21
6.69
1.72
Mar-03
8.81
4.42
9.36
4.54
8.86
5.41
7.50
4.67
5.34
1.76
Mar-05
4.94
1.96
5.38
2.07
5.97
2.72
2.93
1.53
3.01
0.87
40. Summing up…. (2)
Stress testing reveals resilience of banking system due to
strong capital position
June 2013
CRAR
Core CRAR
GNPA
Ratio
Losses as % of
Capital
Baseline
13.4
9.7
4.0
-
NPA increases by 50%
NPA increases by 100%
11.5
8.0
5.9
15.4
10.6
7.0
7.9
23.2
9.6
6.0
9.9
31.0
30% of restructured advances
turn into NPAs (Sub-Standard)
12.1
8.6
5.7
10.4
30% of restructured advances
written off (Loss)
11.2
7.6
5.7
18.2
NPA increases by 150%
41. Summing up .… (3)
Provision coverage ratios of Indian banks low by
international standards – declining in recent times
42. Stressed Assets Provision Coverage Ratio
Provision Coverage Ratio presents a dismal picture when
Restructured Standard Advances are also considered
Mar 2009
Mar 2010
Mar 2011
Mar 2012
Mar 2013
38.47
29.61
34.29
30.00
27.71
OPBs
33.16
35.40
41.58
33.31
31.11
NPBs
38.91
42.64
63.25
55.52
53.73
FBs
51.58
57.73
81.75
83.44
74.04
All Banks
34.80
30.78
36.25
33.00
30.25
PSBs
Stressed Assets Provision Coverage Ratio defined as {(Total Provisions (excl. Provision for std adv) + Tech
W/Os) to (GNPAs + Rest Std Adv + Tech W/Os)}
44. Key Messages …..(1)
Present level of stressed asset as an outcome is not a
big problem but present processes, systems and
structure of creation of stressed assets are a big
problem.
Existing level of NPAs are manageable but if corrective
actions to arrest the slide in NPA are not initiated, the
stability of financial system will be at great risk.
Gross NPAs are not alarming but the quantum and
growth of restructured assets is of great concern
Economic slowdown and global meltdown are not the
primary reason for creation of stressed assets but the
state of credit and recovery administration in the
system involving banks, borrowers, policy makers,
regulators and legal system have contributed
significantly to the present state of affairs.
45. Key Messages ….(2)
Credit quality has a high positive correlation with the
prudential norms and regulations prescribed by RBI
Laxity, soft and flip-flop approach to regulatory and
prudential norms have contributed significantly to
creation of NPAs and stressed assets in the system
Level of Leverage of corporate borrowers, credit growth,
diversion of funds, sub standard assets and fraud cases
are highly correlated. They are first order derivative of
improper credit and recovery management.
Less than 20% of NPAs are upgraded
Reduction of NPAs is less than slippages
About 50% reduction in NPA is through write-off
46. Key Messages ….(3)
Banks following the process of recognizing NPAs quickly
and more aggressively are having better control over
NPAs.
Appraisal standards are lax for bigger loans both at the
time of sanction as also restructuring while appraisal rules
are very stringent for smaller borrowers
Restructuring and write off processes are highly biased
towards bigger loans as compared to smaller loans.
Credit risk for small borrowers is lower than that for bigger
borrowers
Credit risk in priority sector is less than in the non-priority
sector
High pace of credit growth has resulted in lower credit
quality in subsequent periods
47. Measures …….(1)
Credit Appraisal needs to be strengthened with focus on:
Quantum of equity brought in by the promoters
Sources of Equity
Contingency Planning in respect of infrastructure
projects
Improve appraisal and approval process for restructuring
proposals
Benefits of restructuring to be also extended to
smaller borrowers
CDR Mechanism grossly misutilised and needs a thorough
overhaul
Need for an oversight structure for dealing with
restructuring of large ticket advances
Independent body to oversee CDR mechanism
48. Measures …..(2)
Restructuring and Technical Write-off as a prudential
measure should be eased out by the regulator
Existing NPAs need careful examination for determining
rehabilitation or recovery
Conduct viability study
Quick rehabilitation with support from both –the
bank and the borrower
Those who put spoke needs to be sufficiently disincentivized
Bring new promoter if the existing promoter unable
to bring new equity
Restructuring decision should be left to the bank
Quick and determined action is the need of the hour !
50. Recommendations and way ahead
Short run
Addressing the existing stock of impaired assets – NPAs
and restructured
Time bound revival or recovery
Long run
Robust risk management
Improved information system
Facilitating granular analysis of trends in asset quality
Improved credit management
Credit appraisal and monitoring
Facilitative regulatory and legal infrastructure
51. Short term: Review of NPAs / restructured
advances
Assess viability of NPA and restructured accounts – on
case-to-case basis
Pre-stipulated time-frame for review/ restructuring
Accounts found viable
Promoters to assume their share of losses - not resort to
further borrowing for equity
If need be bring new promoters
Burden to be equally shared
Restructuring of small accounts - Reorient restructuring towards
small customers – SMEs, priority sector
Accounts found to be un-viable
Put under time bound asset recovery
banks takeover of units where promoters’ equity is low
sale of assets to ARCs
52. Improve credit risk management
Enhanced Credit Appraisal
Group Leverage, Source/ structure of equity capital
Complex project structure (as in SPV)
External constraints – effective contingency planning
Keep a check on credit growth and linkage with equity
Need for quicker decision making
Appraisal, sanction, disbursement - timely and fast
More compassion to smaller borrower and increased stringency for larger
borrowers
Strengthen Credit Monitoring
Comprehensive MIS
viability assessment
and Early Warning Systems to facilitate regular
Enforce accountability
Accountability on Individuals and all levels of hierarchy
Accountability to encompass all aspects of credit management
Accountability for delayed decision making / non-action
53. Improved information systems
Information systems
management
–
the
backbone
of
credit
risk
Robust information systems needed
Facilitate more intensive data capturing
Integrated into decision making, capital planning, business
strategies, and reviewing achievements.
Enable timely detection of problem accounts,
Flag early signs of delinquencies,
Facilitate timely information to management on these
aspects
Coordinating mechanism across departments within a
bank and across banks
MIS for capturing common exposure across banks
54. Regulatory framework
Need to review the existing regulatory arrangements for
asset classification and provisioning
Facilitative and practical regulation
Restructured accounts to be classified as NPA – aligning
domestic norms with global best practices
The practice of technical write offs of NPAs to be
dispensed with
Increased provisioning requirements in line with
international norms and to ensure resilience of the
banking system
Uniform approach to regulation – either principle or rule
based
For stability in credit risk management practices
55. Reforming legal & institutional structures
Corporate Debt Restructuring (CDR) mechanism
Remove existing bias towards large-ticket accounts
Ensure viability and promoters’ stake upfront
Independent oversight of large CDR account
Debt Recovery Tribunals (DRTs) & other legal provisions
Need for vigorous follow up in the case of suit filed accounts
setting up of more DRTs and DRATs
Asset Reconstruction Companies (ARCs)
Review and revitalise functioning of ARCs
Credit Information Companies (CICs)
Expand use of CICs for credit management
During 1996-2003, NPA ratios declined for PSBs and rose for other bank groups
During 2003-06, NPA ratios declined for all bank groups
During 2007-09, NPA ratios of NPBs and FBs increased; but declined thereafter
After 2009, the ratio rose sharply for PSBs
2007-09
NPA ratios of PSBs remained largely unchanged while that of the new private sector banks and foreign banks increased sharply.
Foreign banks have witnessed the highest spurt in NPA in 2009.
after 2009, when NPAs rose significantly for PSBs while it declined for other bank groups. In 2013, all the bank groups registered an increase in gross NPA ratios, except the new private sector banks.
Slippages - closer metric to assess credit management
Slippages & net slippages started rising since 2006-07
Ratio of slippages and advances restructured and classified as standard during the year (fresh restructured advances) to standard advances at the beginning of the year, also remained high (except in the year 2011).
Extent to which banks able to reduce NPAs through recovery efforts deteriorating
evidenced by increasing ratio of slippages to recovery and upgradation and net slippage ratio
These trends indicate that the current decline in asset quality cannot be simplistically attributed solely to the recent decline in the country’s macroeconomic performance. While the deceleration in GDP growth rate is undoubtedly one of the major factors affecting the asset quality of banks, there are other factors/causal relationships which will need to be explored further in order to fully understand the recent trends in asset quality.