Management of Non-Performing Assets- Perception of Bank Officers
Journal Title: International Journal of Interdisciplinary and Multidisciplinary Studies (IJIMS) - Year 2017, Vol 4, Issue 3
Abstract
A healthy banking industry is a pre requisite for the development of any economy, but in the current economic scenario, the rise in Non Performing Assets (NPAs) of Indian Banks is an alarming Situation for India. The problem of NPAs is related to several internal and external factors confronting the borrowers. Bank officials are important functionaries involved in the operations of the bank, so it was felt that obtaining their opinion, pertaining to NPAs is useful and hence an attempt has been made to know their perception towards the management of NPAs. A survey was conducted with a structured questionnaire. Important causes and impacts of NPAs were studied and ranked. The bank officials considered diversion of fund,economic slowdown and wilful default as the most important causes and erosion of profits and increasing provisions as the two most important consequences of NPAs. Kendall’s coefficient of concordance indicates that there is significant agreement among bank officials in the ranking of different causes and different items of impact of NPA. Further, Analysis of variance (ANOVA) analysis revealed that there is no significant relationship between cadre of bank officials and the causes and items of impact of NPA. The perception of bank officials and Chartered Accountants (CAs) towards other causes was also studied. Bank ownership, Aggressive lending for improving volume of business, Vagaries of monsoon particularly in case of agricultural advances and Waiver of loans by Government have contributed to NPAs are some of the other important causes of NPAs.Recovery measures like Proper sanction process, making borrowers accountable, close monitoring and supervision, maintaining rapport with borrowers, proper pre sanction and Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI)Act prove to be more effective in reducing/containing NPAs.
Authors and Affiliations
Fareed Ahmed, Akhilesh Tripathi
Keywords
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