...RECOVERY OF NPA STATUS AND CHALLENGES IN THE INDIAN BANKING SYSTEM EXECUTIVE SUMMARY: Non-performing Assets means a loan which has been classified by a bank or financial institution as substandard or loss assets. According to this default status would be given to borrower if the dues are not paid for 90 days. Asset Classification: * Standard: are the ones in which the bank is receiving interest as well as the principal amount of the loan regularly from the customer. If asset fails to be in this category i.e. amount due more than 90 days then it is NPA and NPAs are further need to be classified in sub categories. i) Sub-standard: the account holder comes in this category when they don’t pay three instalments continuously after 90 days and up to 1 year; ii) doubtful NPA; iii) Loss Assets: under this 100% provision is made. When account holder comes in this category their account can be written off by the banks. Types of NPA: * Gross NPA: reflects the quality of the loan made by the banks. * Net NPA: reflects the actual burden of the banks. The main reason behind NPA would be lack of proper enquiry by the bank, wilful defaulter, change in government policies etc. which could affect the bank by restriction on flow of cash by the bank for sanctioning a loan, drain of profit, bad affects on goodwill, etc. There are different acts and institution for the NPA recovery like SARFAESI ACT, 2002; SARC; ARC; DRT; Lokadalats; etc. Current...
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...Determinants of NPAs in the Indian Public Sector Banks: A Critique of Policy Reforms Dr. Pradip Kumar Biswas* and Ashis Taru Deb** The paper analyzes the process leading to formation and perpetuation of high levels of NPAs in Indian Public Sector Banks (PSBs). It distinguishes between random and non-random reasons of NPA formation in PSBs. It points out that a high degree of arbitrariness is involved in defining NPAs as it fails to capture diversity in terms of the seasonal and cyclical nature of the economic activities in India. The study conceptualizes random reasons for default in a simplified framework of a Poisson process. It then argues that the non-random reasons go beyond the conventional paradigm of interim, ex-ante and ex-post information asymmetries and incomplete contracts. It points out that the financial notion of NPA as a mere risk phenomenon is inadequate, because a number of reasons leading to non-random generation of NPA are related to the dimension of uncertainty. It highlighted that the use of a secondary asset market may take care of NPA problem, but it requires a number of conditions for its use, which hardly exist in India. The study observes a number of reasons for generation of NPAs which are important and peculiar to India. This is followed by a critical evaluation of the series of policy measures that have been adopted to improve the NPA scenario since liberalization. While one set of policies granting greater autonomy to the PSBs are proved to be quite...
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...“CREDIT APPRAISAL PROCESS ON WORKING CAPITAL FINANCE IN HDFC BANK (MSME)” A summer internship project submitted in partial fulfilment of the requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION By BIPIN CHANDU M Register No 1220310 Under the guidance of PROF. KRISHNA M C Institute of Management Christ University, Bangalore MBA 2012-2014 DECLARATION I, , do hereby declare that the summer internship project entitled Credit Appraisal Process on Working Capital Finance at HDFC Bank (MSME) has been undertaken by me for the award of the degree of Master of Business Administration. I have completed this study under the guidance of Prof. Krishna M, Professor of Finance, Institute of Management, Christ University, Bangalore. I also declare that this project work has not been submitted for the award of any degree, diploma, associate ship or fellowship or any other title in this University or any other university Place: Bangalore Date: (Name & Signature of the Candidate) Bipin Chandu M Register No 1220310 CERTIFICATE This is to certify that the summer internship project submitted by Mr Bipin Chandu M on the title “Credit Appraisal Process on Working Capital Finance at HDFC Bank (MSME)” is a record of research work done by him during the academic year 2012 – 14 under my guidance and supervision in partial fulfilment of Master of Business Administration. This project work has not been submitted for the award of any degree, diploma, associate ship or fellowship...
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...RESEARCH DESIGN OBJECTIVES OF THE STUDY ➢ Understanding credit risk management conceptually. ➢ Studying the various private banks practicing credit risk management. ➢ To make a depth study of the method in which the private banks in India go about credit risk management. ➢ Studying the difference between retail credit risk management and corporate credit risk management practiced by private banks. ➢ Understanding the importance of the credit risk management and how useful it is to the private banks and how it benefits them in various ways. PURPOSE OF THE STUDY The main reason to select “CREDIT RISK MANAGEMENT” as a topic is to understand the importance of the Role played by credit risk management department and/or practices when the bank lends money to its borrowers. In this project, I have tried to understand the difference between corporate credit risk management and retail credit risk management. The analysis and interviews with industry personnel has given me a practical and real life exposure to the banking scenario as far as the credit risk management goes, whereby I could correlate between the theory and their practical application. RESEARCH METHODOLOGY DATA COLLECTION The data collection i.e. the raw material input for the project has been collected keeping in mind the objectives of the project and accordingly relevant...
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...Subject: FINANCIAL MANAGEMENT Course Code: M. Com Author: Dr. Suresh Mittal Lesson: 1 Vetter: Dr. Sanjay Tiwari FINANCIAL MANAGEMENT OF BUSINESS EXPANSION, COMBINATION AND ACQUISITION STRUCTURE 1.0 Objectives 1.1 Introduction 1.2 Mergers and acquisitions 1.2.1 Types of Mergers 1.2.2 Advantages of merger and acquisition 1.3 Legal procedure of merger and acquisition 1.4 Financial evaluation of a merger/acquisition 1.5 Financing techniques in merger/Acquisition 1.5.1 Financial problems after merger and acquisition 1.5.2 Capital structure after merger and consolidation 1.6 Regulations of mergers and takeovers in India 1.7 SEBI Guidelines for Takeovers 1.8 Summary 1.9 Keywords 1.10 Self assessment questions 1.11 Suggested readings 1.0 OBJECTIVES After going through this lesson, the learners will be able to • Know the meaning and acquisition. 1 advantages of merger and • Understand the financial evaluation of a merger and acquisition. • Elaborate the financing techniques of merger and acquisition. • Understand regulations and SEBI guidelines regarding merger and acquisition. 1.1 INTRODUCTION Wealth maximisation is the main objective of financial management and growth is essential for increasing the wealth of equity shareholders. The growth can be achieved through expanding its existing markets or entering in new markets. A...
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...SOCIO‐ECONOMIC PROFILE OF STATES AND INTER‐STATE COMPARISONS 21 ASER 2013: Main Findings 23 SKILL DEVELOPMENT 24 HOW INDIA NEEDS TO FACE CLIMATE CHANGE 24 AGENDA FOR ECONOMIC REFORMS 28 INFRASTRUCTURE 30 WHY LONG‐RUN MATTERS 30 FIVE PRONGED STRATEGY TO CONTROL INFLATION 31 URJIT PATEL COMMITTEE 32 Some Major Issues in India's Merchandise Trade Sector 32 MAKE IN INDIA OPPORTUNITY 34 Make for India or Make in India – The debate begins! 37 VULNERABILITY COMPARISON OF INDIAN ECONOMY 38 PM JAN DHAN YOJANA 39 COOPERATIVE FEDERALISM 40 ZERO DEFECT, ZERO EFFECT 41 DIGITAL INDIA 42 TWO FACTOR IDENTIFICATION ISSUE 43 MINSK AGREEMENT 44 WILFUL DEFAULT 44 © EssaysforIIM.com 2014‐15 Page 1 Issues for IIM PI Process http://www.essaysforIIM.com ‘MAKE IN INDIA’ 45 Features of the ‘Make In India’ campaign .............................................................................................. 46 PM MODI’S ADDRESS TO UN GA 46 ‘CHALEIN SAATH SAATH’ 47 DEEPAK PAREKH COMMITTEE ON INFRASTRUCTURE 48 ‘JAPAN PLUS’ 48 WHY CRONY CAPITALISM PERSISTS 49 ISSUES IN THE SHG BLP 51 INCLUSIVE RURAL FINANCIAL...
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...Economic Outlook, Prospects, and Policy Challenges 01 CHAPTER This year’s Economic Survey comes at a time of unusual volatility in the international economic environment. Markets have begun to swing on fears that the global recovery may be faltering, while risks of extreme events are rising. Amidst this gloomy landscape, India stands out as a haven of stability and an outpost of opportunity. Its macro-economy is stable, founded on the government’s commitment to fiscal consolidation and low inflation. Its economic growth is amongst the highest in the world, helped by a reorientation of government spending toward needed public infrastructure. These achievements are remarkable not least because they have been accomplished in the face of global headwinds and a second successive season of poor rainfall. The task now is to sustain them in an even more difficult global environment. This will require careful economic management. As regards monetary and liquidity policy, the benign outlook for inflation, widening output gaps, the uncertainty about the growth outlook and the over-indebtedness of the corporate sector all imply that there is room for easing. Fiscal consolidation continues to be vital, and will need to maintain credibility and reduce debt, in an uncertain global environment, while sustaining growth. On the government’s “reformto-transform” agenda, a series of measures, each incremental but collectively meaningful have been enacted. There have also...
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