A study on NPA Management in Banks

Objectives:
1. To study the concept and the different types of NPAs from the Indian Perspective
2. To understand the guidelines framed by RBI regarding the management of NPA in banks
and its implications on the asset quality of the banks
3. To study the causes and effects of the NPAs faced by the Indian Banking Sector
4. To analyze the best adopted strategies by the banks to manage the NPAs
5. To understand the impact of NPA ratio on the asset quality of the banks
6. To understand the impact of Coalgate Scam on the lending strategies of Banks

Methodology:
The research would be exploratory in nature, where in the data would showcase the current
scenario of NPAs in the Indian Banking Sector collected from the secondary sources such as
Internet, Journals, Magazines, etc.
The secondary data would be further analyzed for understanding the importance of the growing
concern of NPAs for the Indian Banking Sector.

Managerial Implications:
The current market conditions have induced the corporates to tap the opportunity to expand their
businesses and gain the competitive advantage over their competitors. With this concern the main
objective of the corporates is to raise finance through many sources, where one of them would be
Loans/Borrowing from the banks. This is a form of debt which a corporate can raise from the
banks that can be used for the purpose of organic as well as inorganic growth.
Accordingly, the banks lend to these corporates expecting them to perform better in this business
environment and therefore they can earn their interest income as well as the principal repayment
on a regular basis. But, the present scenario shows the reverse situation where in the
macroeconomic factors have made it difficult for companies to even survive in the competitive
business environment. The Sub-prime crisis of 2008, has led the bankers to think and reframe
their lending strategies to overcome the problem of rising NPAs.
In the country like India, the business environment is not yet conducive for corporate to make
immediate profits and growth. This has led the companies to default in making the payments to

the banks. Therefore, the rising NPAs in the Indian banks has raised the concern for them to look
upon the right kind of borrowers with good credibility who would not default in their payments.