Full Npa - Dessertation

A Study Of NPA Management of Central Bank of India
Chapter 1
NATURE & SCOPE OF STUDY
1.1 Introduction
The three letter NPA strike terror in banking sector and business circle
today NPAof Non-Performing Asset. The dreaded NPA rule says that,when
interest or other due to bank.Remain unpaid for more than 90 days the entire
bank loan automatically turn as a non-performing Asset the recovery of loan
always a problem for bank and financial institution to overcome these firstWe
need to think is it possible to avoid NPA.
NPAs are an inevitable on the banking industry. Banks need to monitor
standards asset.To arrest anyAccount becoming an NPA.Today the success of
bank depends upon the methods of managing NPAs and keeping them with in a
lance level.
NPA is non-performing asset is defined as a credit facility in respect of
which the interest or installment of Principal has remained past due for
specified.Non-Performing Assets,also called NON-Performing loans,are loans
made by a bank or finance company.
On which repayment or interest payments are not being made on time. A
loan is an asset for a bank as the interest payments and the repayment of the
principal create stream of each flows. It is forming the interest payments than a
bank makes its profits. A high level of Non-Performing Assets compared to
similar lenders may be a sign of problems,as may a sudden increase.
Howeverthis needs to be looked at in the context of the type of lending being
done needs to be looked at in the context of the and type of lending being done.
Some banks lend to higher risk customers than others and therefore tend to have
higher risk customers than others and therefore tend to have higherinterest rates,
increasing spreads.
P. R. Patil College of Engineering & Technology, Amravati

Mortgage lenders will almost certainly have lower non-performing
assets than a credit card sealift but the latter will have higher spreads and may
well
Make a bigger profit on the same assets, even if it eventually has to write off
Non-performing loans
1.1.1) Definition:An asset is classified as non-performing asset (NPAs) if dues in the form
of principal and interest are not paid by the borrower for a period of 180 days.
However with effects from March 2004, default status would be given to a
borrower if dues are not paid for 90 days. If any advance or credit facilities
granted by bank to a borrower become non-performing, then the bank will have
to treat all the advance/credit facilities granted to that borrower as nonperforming without having any granted to the fact that there still exist certain
advances/credit facilities having performing status.
For a bank or a lending institution, an NPA or bad debt is usually a loan
that is not producing income. Earlier it was largely applicable to businesses.
But things have changed with banks widely extending consumer loans (home ,
car, personal and education, among others) and strict asset classification norms.
If a borrower misses paying his equated monthly installment (EMI) for 90 days,
the loan is considered bad, or an NPA are a sign of bad financial health. This
has wide-ranging ramification for a bank, especially in the stock market and
money market. So, as soon as a debt goes bad, the banks want it either made
better or taken out of their books.
To begin with it seems appropriate to define Non-performing advances,
popularly calledNPA
A Non Performing advances is defined as
An advance where payment of interest or repayment of interest or
repayment of installment of principal (in case of term loans) or both remains

unpaid for of two quarters or more. An amount under any of the credit facilities
is to be treated as past due when it is remains unpaid for 30 days beyond due
date.
As per recommendation of narasimhan committee, it has been decided that
credit facilities granted by banks will be classified in to performing and Non
performing asset.
NPA is a loan (whether term loan, cash credit, overdraft, or bills
discounted) which is in default for more than threemonths.In case of such
Assets, the income should be shown only on receipt and not shown in the banks
book on a due basis.
1.1.2) NPAs have become an issue for banks and financial institutions in
India:
To Start with, Performance in terms of profitability is a benchmark for
any business enterprise including the banking industry. However, increasing
NPAs have a direct impact on banks profitability as legally banks are not
allowed to book income on such assets as per the Reserve bank of India (RBI)
guidelines.
Also, with increasing deposits made by the public in the banking system,
the banking industry cannot afford defaults by borrower since NPAs affects the
repayment capacity of banks.
Further, Reserve Bank of India (RBI) successfully creates excess
liquidity in the system through various rate cuts and banks fail to utilize this
benefit to its advantage due to the fear of burgeoning non-performing assets.
The ratio of Non-performing assets to advantage reflects the quality of
abanks loan portfolio.
A distinction is often made between Gross NPA and NET NPA. NET
NPA, which is obtained by deducting from gross NPA items like interest due but
not recovered, part payment received and kept in suspense account, etc, is

internationally accepted as the more relevant indicator of financial health of the
banks.
It is the level of non-performing assets which, to a grant extent, different
between a good and bad banks. The subject of high NPA levels in banks has also
been frequently raised in various areas.
1.1.3) Importance of Non Performing Assets:
The one major cause for the current weakened state of banking sector is
the level and volume of NPAs. The problem has not been looked at in its proper
perspective. Description such as decreased portfolio and figures running into
thousands of cores have all led to treating the problem as a major one-time
aberration requiring emergency treatment.
The casual explanation
politicalInterface, willful defaults, targeted lending and even fraudulent

behavior by banks allowed them to be pressurized into lowering their guard in
the one area of business that is their bread and butter of existence-risk
assessment.
Lending to priority medium and small companies is likely to be the
banks main activity in the time to come. The bigger, established corporations
would have the wide world to choose from and to meet their requirement. The
shift to medium-sized borrowers and slightly riskier lending will form prime
activity of all banks. The problem will then, be to ensure that such lending is
justified on a commercial criterion.
The high level of NPAs in Indian banking sector is the result of application of
prudential norms of accounting from 1992 onwards. The introduction of CAC
is subject to the NPA level being brought down to less than 5% from the present
level if around 16%. The government of India already initiated several steps to
help banks in reducing their NPAs. Several of these NPAs are still outstanding
in the books of accounts because they are not supported by adequate provisions.
Introduction of prudential norms on income, recognition, asset
classification and provisions during 1992-93 and other steps initiated apart from
bringing in transparency in the loan portfolio of banking industry
havesignificantly contributed towards improvement of the pre-sanction

appraised and post sanction supervision which is reflected in lowering of the
level of fresh accretion of NPAs of banks after 1992.
The researcher has undertaken the study of the fast developing Central
bank with reference to its and reviews, it is necessary to understand financial
position of bank. It presents a picture of movement of NPA
The concept of non-performing asset refers to which ceases to generate
income. In case of bank, all loan and advances are its assets, which can be
classified into performing and non-performing assets, which can be classified
into performing and non-performing assets. RBI has advises the banks not to
charge interest on those loans and advance classified as non-performing asset.
NPA is short form of Non-Performing Asset. The created NPA rule says
simply this: when Interest or other due to a bank remains unpaid for than 90
days. The entire bank loan automatically turns nonperforming assets. The
recovery of the loan has always been problem for the bank and financial
institutes to come out to this first we need problem for the bank and financial
institutes
To come out of this first we need to things is it possible to avoid NPA no
cannot be then is to look back after the factor responsible for it and managing
those factors.
Over a long period of time the performance of urban co-operative banks
(UCBS) has been deteriorating due to non-recovery of interest and installment
on loan portfolio.
After the deregulation of Indian economy the government has announced a
number of reform measures on the basis of recommendations of Narsimham
committee to make banking sector economically viable and competitively
strong.
The RBI introduced the concept of NPA and certain norms with effect
from 1st April 1992.

These norms were introduced not only to know the true financial picture
in the financial statements but also to take corrective action for improving the
performing in the recent years.
Mounting NPAs are adversely affecting the profitability, liquidity and solvency
position of banking sector. Hence in the context of global competition it is a
paramount task for the banks to manage their NPAs more efficiently so that they
can change their character from non performing assets to performing assets.
With a view to moving towards international best practices and to ensure
greater transparency, it has been decided to adopt the 90 days overdue norm
for identification of NPAs from the year ending March 31, 2004, a nonperforming asset (NPA) shell be a loan or an advance where;
1. Interest and/or installment of principal remain overdue for a period of more
2.
than 90 days in respect of a Term Loan

The account remains out of order for a period of more than 90 days, in
respect of an overdraft / cash credit(OD/CC),

3. The bill remains overdue for due harvest season but for a period not
exceeding two half years in the case of an advance granted for agriculture
purpose, and
4. Interest and/or installment of principal remains overdue for two harvest
season but for a period not exceeding two half years in the case of an
advances granted purpose,
1.2) Review of Literature:


Tanmayakumarpradhan
Non-Performing Assets
have
been
substantially reduced
since
regulations were tightened in 1993, but improvement has recently slowed down and
the levels of NPA remain high compared to international standards. According to RBI
norms, NPA has been defined as a credit facility in respect of which interest has
remained past due for a period of four quarters. An amount under any credit facility is
past due when it has not been paid within 30 days from the due date. It examines the
trends of NPA, trends in Gross advances and Gross NPA, bank-wise NPA, quantum of
NPA in public sector banks. The study is based on the secondary data. The data has
been analyzed by percentage method. The rate of decline in Gross NPA has been
extremely low during the last decade. There has been a marked improvement in the
asset quality with the percentage of Gross NPA to Gross advances reduced in the post
reform period.
Poongavanam.S
The banking industry has undergone a sea change after the first phase of
economic liberalizationin 1991 and hence credit management. While the primary
function of banks is to lend funds asloans to various sectors such as agriculture,
industry, personal loans, housing loans etc., in recenttimes the banks have become
very cautious in extending loans, this is due to mounting nonperformingassets
(NPAs). Therefore, an NPA account not only reduces profitability of banks
byprovisioning in the profit and loss account, but their carrying cost is also increased
which resultsin excess & avoidable management attention. Apart from this, a high
level of NPA also putsstrain on a banks net worth because banks are under pressure
to maintain a desired level ofCapital Adequacy and in the absence of comfortable
profit level, banks eventually look towardstheir internal financial strength to fulfill the
norms thereby slowly eroding the net worth.Considering all the above facts banking
industry has to give more importance to NPA and tostructure proper remedial
solutions.
1.3) Definition of Problem:

The Non Performing Asset (NPA) concept is restricted to loans,
advances and investments. As long as an asset generates the income expected from it
and does not disclose any unusual risk other than normal commercial risk, it is treated
as performing asset, and when it fails to generate the expected income it becomes a
Non Performing Asset. In other words, a loan asset becomes a Non Performing
Asset (NPA) when it ceases to generate income, i.e. interest, fees, commission or any
other dues for the bank for more than 90 days.
A NPA is an advance where payment of interest or repayment of
installment on principal or both remains unpaid for a period of two quarters or more
and if they have become past due. An amount under any of the credit facilities is to
be treated as past due when it remain unpaid for 30 days beyond due date. It is also
called as Non Performing Loans. It is made by a bank or finance company on which
repayments or interest payments are not being made on time. A loan is an asset for a
bank as the interest payments and the repayment of the principal create a stream of
cash flows. It is from the interest payments that a bank makes its profits. Banks
usually treat assets as nonperforming if they are not serviced for some time.
1.4) Objective of study:

1 To analyze financial performance of bank at different level of NPAS
2 To calculate the weighted of NPA in risk management in banking
3 To identify significant strategy of NPA management
1.5) Scope of study:

The study is laid on macro level and finds the impact of NPAs in central bank
of India .it is also analysis the efficiency of recovery measures undertaken by central
bank of India.Keeping in view the important CBI bank in rural development of
economic significant of the CBI bank operates in the economy of the country. The
researcher has undertaken of the study of bank etc.
It is necessary to understand the financial position of bank, it present a picture
of movement of NPA in bank. In this study it covers how NPAs level will affected the
profit of the bank. It shows reason of NPAs & preventive measure. It gives the
opportunity to study various kind of loan & its having eligibility how to sanction it.
Chapter 2
ORGANIZATION PROFILE
2.1 Introduction of central bank of India
Central Bank of India
Type
Industry
BSE&NSE:CENTRALBK
Financial
Founded
Headquarters
Key people
Revenue
Website
Commercial banks
21 December 1911; 102 years ago
Mumbai, India
Shri. Rajeev Rishi, Chairman & Managing Director
19149.50 crore (US$3.1 billion) (2011-12)
www.centralbankofindia.co.in
Central Bank of India, Mumbai

Central Bank of India a government-owned bank, is one of the oldest and largest
commercial banks in India. It is based in The bank has 4100 branches and 270
extension counters across 27 Indian states and three Union Territories. At present,
Central Bank of India has one overseas office, which is a joint venture with Bank of
India, Bank of Baroda, and the Zambian government. The Zambian government holds
40 per cent stake and each of the banks has 20 per cent. Recently it has also opened a
representative office at Nairobi, Kenya.
Central bank of India is one of 18 Public Sector banks in India to get recapitalization
finance from the government over the next 24 months.
Central Bank of India has approached the Reserve Bank of India (RBI) for permission
to open representative offices in five more locations - Singapore, Dubai, Doha,
London and Hong Kong.

As on 31 March 2011, the bank's reserves and surplus stood at 6,868.85 crore. Its
total business at the end of the last fiscal amounted to 2,09,757.33crore.
2.2 History
It was established on 21 December 1911 by Sir SorabjiPochkhanawala with Sir
Pherozeshah Mehta as Chairman and claims to have been the first commercial Indian
bank completely owned and managed by Indians.
In 1923, it acquired the Tata Industrial Bank in the wake of the failure of the
Alliance Bank of Simla.
In 1969, the Indian Governmentnationalized the bank on 19 July, together with 13
others.
In the 1980s the managers of the London branches of Central Bank of India, Punjab
National Bank, and Union Bank of India were caught up in a fraud in which they
made dubious loans to the Bangladeshi jute trader Rajender Singh Sethia. The
regulatory authorities in England and India forced all three Indian banks to close their
London branches.
Central Bank of India was one of first bank to issue credit cards in the year 1980 in
collaboration with MasterCard Central Bank of India announces Financial Result for
year ended 2013-Total Business Rs.402000 Cr. Net Profit-Rs.1015 Cr. On August 1st
Central Bank of India appoints new CMD Rajiv Rishi, who was previously ED of
Indian Bank and General Manager of OBC. Raj Kumar Goyal new ED of the bank.1st
November 2013 Bank open 2nd Representative Office at Hongkong.
2.3 Bank Details
Central Bank of India, a public sector banking institution is one of the oldest and
largest commercial banks in India. The bank has their branches in 27 States and four
Union Territories in India. The Bank's main business is takingdeposits, lending
money and making investments.

They also offer a wide range of general banking services to our customers, including
credit cards, debit cards, cash management and remittance services and collection
services. The Bank distributes third party life and non-life insurance policies and
mutual funds on an agency basis. They act as agent for various state governments
and the Government of India on numerous matters including the collection of taxes
and the payment of pensions. They also issue traveller's cheques and gift cheques.
The Bank's deposit taking and lending business is divided into three main areas,
namely retail, agriculture and corporate. The retail business provides financial
products and services, such as loans and advances for housing, retail trade,
automobiles, consumer durables, education and other personal loans to their retail
customers. The agricultural banking business offers direct financing to farmers for
production and investment, as well as indirect financing for infrastructure
development and credit to suppliers of agricultural inputs. The Bank provides
commercial banking products and services to corporate and commercial customers,
including mid-sized and small businesses and government entities. The Bank
sponsors 7 Regional Rural Banks in collaboration with the state governments of
Madhya Pradesh, Chhattisgarh, Bihar, Maharashtra, Uttar Pradesh and Rajasthan.
Also, they entered into agency agreements with Life Insurance Corporation of India
and The New India Assurance Company Ltd to distribute their various insurance
products, for which they are paid a fee. In order to develop rural entrepreneurship,
the Bank launched a Rural Development and Self Employment Training Institute
(Rudseti) at Hoshangabad. This provided intensive entrepreneurship training to the
rural youth and enables them to take to vocational activities. Also, the Bank
launched Financial Literacy and Credit Counseling Centre at Vadkun in Thane,
which provides free counseling to the villagers on the various banking products,
both deposits and loans and also counseling to distressed borrowers, irrespective of
whether they are bank's clients or not. Central Bank of India was incorporated on
December 21, 1911 as The Central Bank of India Ltd and was founded by Sir
SorabjiPochkhanawala. In May 1, 1929, the Bank incorporated The Central Bank
Executor and Trustee Company Ltd (now known as Central bank Financial and
Custodial Services Ltd) as a subsidiary of the Bank to undertake the trustee and
executor business and act as executors, administrators and trustees and executes
private and public trusts, including, religious and charitable trusts.

In the year 1969, the Bank was nationalized along with 13 other major commercial
banks and the Bank is currently owned by the Government of India. The Bank was
renamed as Central Bank of India. The Bank introduced the credit card in the name
'Centralcard' in the year 1980. In the year 1984, Indo-Zambia Bank Ltd, a joint
venture Bank was incorporated under the laws of the Republic of Zambia, which
carries out banking activities in Zambia.In the year 1991, the Bank incorporated
Cent Bank Home Finance Ltd (formerly known as ApnaGharVitta Nigam Ltd), a
housing finance institution registered with the National Housing Bank as a
subsidiary of the Bank for providing long term finance for the purchase or
construction of houses in India. In the year 1994, Quick Cheque Collection Service
(QCC) & Express Service was set up to enable speedy collection of outstation
cheques. In the year 2007, the Bank restructured their entire paid up capital by
conversion of an amount aggregating Rs 8,000 million out of the equity share
capital of Rs 11,241.40 million into perpetual non-cumulative preference share
capital, while retaining the balance amount aggregating Rs 3,241.41 million as
equity share capital of the Bank. The Bank entered into agreements with UTI Asset
Management Company Pvt Ltd and Tata Asset Management Ltd for the sale of their
mutual fund products, for which the Bank is paid on a commission basis and fee
basis, respectively. During the year 2007-08, the Bank opened 96 branches and 1
new extension counters, upgraded 22 extension counters to full fledged branches
and merged 4 branches and 3 extension counters with the base office. The Bank
launched two retail lending scheme, such as Cent Udaan, which is the scheme for
educational loan for commercial pilot training courses and Cent Swabhiman, a
reverse mortgage loan scheme for senior citizens, in which senior citizens can
monetise their residential property by mortgaging the same and in turn get periodic
payments or lumpsum payment. In May 2007, the Bank entered into an agreement
with Franklin Templeton Asset Management (India) Pvt Ltd to distribute units of
schemes of Franklin Templeton Mutual Fund. In July 2007, the Bank entered capital
market with their maiden initial public offer. The IPO received stupendous response
and was successfully oversubscribed by 62.07 times-the highest ever subscription
received by any bank in India. After this issue, the Government of India's
shareholding in the Bank reduced to 80.20%. In March 15, 2008, the Bank entered
into a MoU with SME Rating Agency of India Ltd for rating of SME borrowers.

Central Bank of India was conferred with the 1st Award under National Awards for
Excellence in MSE Lending based on their outstanding performance in lending to
Micro and Small Enterprises during the year 2007-08. In December 29, 2008, Kotak
Mahindra Asset Management Company, one of India's leading mutual fund houses,
entered into a distribution tie-up with Central Bank of India. Under the agreement
Central Bank of India will offer the entire bouquet of Kotak Mutual Fund products
from their branches. During the year 2008-09, the Bank opened 190 branches and
22 Extension Counters were upgraded into full-fledged branches. Also, two
branches namely, Cuffe Parade branch and Versova Road branch were merged with
Colaba Causeway branch and Seven Bunglows branch respectively.
In August 2008, the Bank launched two premium visa credit card products - Visa
Platinum and Visa Gold credit cards. They completed roll-out of 400 ATMs by
October 2008 as per Phase-l implementation. During the year, 3 RRBs namely
SatpuraKshetriyaGramin Bank, Chambal Gwalior KshetriyaGramin Bank and
RatlamMandsaurKshetriyaGramin Bank in Madhya Pradesh were amalgamated and
formed a new entity with the name as Satpura Narmada KshetriyaGramin Bank.
Also, 2 RRBs namely Uttar Bihar KshetriyaGramin Bank and KosiKshetriyaGramin
Bank in Bihar were amalgamated and formed a new entity with the name Uttar
Bihar Gramin Bank. During the year 2010-11, the Bank opened 49 branches,
upgraded 11 extension counters to full fledged branches and merged 1 branch. As
per the Government of India notification, 2 RRBs namely BalliaKshetriyaGramin
Bank and EtawahaKshetriyaGramin Bank in Uttar Pradesh were amalgamated and
formed a new entity with the name as BalliaEtawahaGramin Bank. During the year,
the Bank introduced new schemes to cater to market demand. These are Short Term
Loan to companies eligible for issuance of Commercial Paper, Production
Equipment Finance Scheme, Mibor linked short term loan for large corporate and
Cent Swabhiman Plus (Annuity product) Cent Doctor and Cent Personal Gold Loan
for Retail segments. Also, they commenced loan syndication which has elicited
good response from the market. In March 2009, the Bank launched prepaid CentGift Cards and got license for issuance of prepaid Travel Cards in foreign currency.
They entered into tie-up arrangement with HCL Infosystems Ltd., for providing
need based finance for purchase HCL computers and also joined hands with Future
Group for marketing Retail products to the customers at Big Bazaar Departmental

Store all over India.
During the year 2011-12, the company opened 82 new branches and upgraded 53
extension counters into full fledged branches. They also opened 17 Mid Corporate
branches and 1 Asset Recovery Branch. They opened 2 temporary branches for
Common Wealth Games at Delhi which were closed. The ATM network was being
expanded on a large scale. Banks ATM network in year 2011-12 was expanded from
400 to 1006. The Bank has increased their paid-up capital by way of issue of
Preference Shares in the form of Perpetual Non-Cumulative Preference Shares
(PNCPS) to the tune of Rs 250 crore to Government of India. In August 2011, the
Bank entered into an agency tie-up with Cholamandalam MS General Insurance
Company for selling their insurance products. The products will be customised for
the Bank and will be sold through 3,728 bank branches. The Bank is in the process
of installing additional 900 ATMs including 150 bio-metric ATMs. They are also
planned to install 1000 ATMs in rural areas and 1500 off site ATMs. The Bank is
also in the process for having NEFT, direct Tax payment facility through ATMs.
2.4 LOGO OF BANK
2.5) Products and Services offered by Bank

Central Bank offers wide variety of Loans Products and services in India
to suit your requirements with convenience of networked branches/ ATMs and

facility of E-channels like internet and Mobile Banking, Central Bank brings
banking at your Doorstep.
Select any of our loan product and provide your details online and our
representative will contact for getting loans.
1
2
3
4
5
1
Home loans
Car loans
Personal loans
Commercial vehicle loans
Two Wheeler loans
HOME LOANS :Home loan Amount- restricted to a maximum of 80% of the cost of the
property or the cost of construction as applicable.
Tenor- Maximum tenure of your home loan can be 20 years. However, in case
of salaried customers it is capped at retirement age.
Home Loan Repayment Terms
In our endeavor to make taking a Home loan an easy process for you, we at
CENTRAL BANK address all your queries about the repayment terms of loan
with respect to tenure, home loan EMIS, methods of home loan EMI payments
and Pre EMI interest.
THE REPAYMENT TENURE
Repayment tenure is the tenure for the number of year for which the loan gets
sanctioned. We offer you a wide range of option for the tenure of the loan. You
can take a home loan for up to 20 years provided you do not reach the age of 65
years or retire within that period.
Loan repayment
An EMI refers to an equated monthly installment. It is a fixed amount which
you pay every month towards your loan.
It comprises of both, principal
repayment and interest payment.


Repayment starting
EMI payments start from the month following the month in which the full
disbursement has been made.
EMI payment
The EMI to be paid every month through post-dated cheques (PDCS) or
Electronic Clearing System (ECS).If you are opting for PDCS upfront. The
PDCS are to dated on the 1st of every month. However, if you receive your
salary a few days later, we provide, we provide the flexibility of dating the
cheques for the 10 month. In case you have an CENTRAL BANk saving
account you can also go in for the facility of Auto Debit.
PDC bounces:
IN the case of a bound cheque or delayed payment, Charge and outstanding
dues will be charged as per the prevailing company policy. You can replace old
PDCS with new ones within 5-7 working days.
Pre-EMI Interest
In the case of part disbursement ofthe loan, monthly interest is payable only on
the disbursed amount. This interest is called pre- EMI interest (PEMI) and is
payable monthly till the final disbursement is made, after which the EMIs would
commerce.
2
CAR LOANS
Loan amount
The minimum loan amount for taking a new car loan is rs. 1,00,000. The
Maximum loan amount will depend upon the price of the car, model variant,
profile of the customer, etc.
Documentation
At CENTRAL BANK car loans, offer of the most convenient, flexible & quick
car loan of the click mouse. Keeping Your convenience in mind, we ask you for

Minimal mandatory documents for the sanctioning of your car loan.
Income proof
Salaried individuals
Latest Salary Slip and 2 years from 16/ Income tax returns.
Self Employed individuals
Income Tax Returns of 2 previous financial years.
Partnership Firms, societies & Companies

Income Tax returns of 2 previous financial years along with complete financial/
audit report.
Documents supporting customer information
Identify proof, signature proof and address proofs as per CENTRAL BANK
norms(our representive will help you choose suitable documents)
Other document:
Partnership Firms: Partnership deed and letter signed by all partners
authorininsing one partner to execute the required Car loans documentation.
Societies and Companies: Resolution by board of Directors (or such managing
body) & Memorandum & Articles of Association (or Society Trust deed.)
3. PERSONAL LOANS
CENTRAL BANK personal loan:
Loan up to Rs. 10nlakhs.

No security/ Guarantor required.
Faster processing.
Minimum Documentation.
Attractive rates of interest.
Flexible repayment option of 12-48 months.
COMMERCIAL VEHICLE LOANS

Loan Amount:-
The loan depends on applicants requirement

Funding can be to extent of 100% of the chassis values: body funding can only
be extend on special requirement.
Repayment:The tenure of the loan may vary from 12 to 60 months, depending upon the
nature of the deal and the repayment capacity.
Repayment can be made through post-dated cheques (PDCs)/ ECS or through
Auto_debit in the case of CENTRAL bank account holders.
Prepayment of the loan is allowed, at a charge indicated on the Service Charges
PageIn the event of an accident, you need to inform our local representive of it.
Chapter3
RESEARCH METHODOLOGY
3.1) Introduction:

The process used
to
collect information and data for
ofmakingbusinessdecisions.
the
purpose
The methodology may
includepublicationresearch,interviews,surveys and other research techniques, and

could include both present and historical information.
Methodology is the systematic, theoretical analysis of the methods applied to a
field of study. It comprises the theoretical analysis of the body of methods and
principles associated with a branch of knowledge. Typically, it encompasses concepts
such as paradigm, theoretical model, phases and quantitative or qualitative techniques.
A methodology does not set out to provide solutions - it is, therefore, not the
same as a method. Instead, a methodology offers the theoretical underpinning for
understanding which method, set of methods, or so-called best practices can be
applied to specific case, for example, to calculating a specific result.
Source: www.googleimages.com
3.2) Research Design:

To collect data needed to address the above mentioned objectives the
descriptive research design was used.

Descriptive research was used to describe characteristics of a population or
phenomenon being studied. It does not answer questions about how/when/why the
characteristics occurred. Rather it addresses the "what" question the characteristics
used to describe the situation or population is usually some kind of categorical
scheme also known as descriptive categories
3.3) Sources of Data Collection:

Data means information required in the research. There are two types of data
sources, which have been helpful to carry out the research these, are as follows:
1) Secondary data
Secondary data are those, which have already been collected by publication of
Governments, Periodicals of organization, newspaper, books, & internet etc.
In this research secondary data was collected form newspaper, books, company
website, magazines, etc.
3.4) Tools of Data Evolution:

Designing the methods that you will use for your evaluation can seem quite
daunting, but it need not be complicated or challenging. What is important is that the
methods and tools you use are appropriate for your evaluation questions. The
approach you take will, to a large extent, be determined by the aims and objectives of
your evaluation.
In this research process qualitative method was used to evaluation of data.
3.5) Limitation:
1. The study is restricted three years, i.e.2011-12, 2012-13, 2013-14
2. Study is restricted following loans
Home loan

Car loan
Personal Loan
Commercial vehicle loan
Two wheeler loan
Chapter 4
CONCEPT OF STUDY
4.1) Introduction
Reserve Bank of India introduced a critical analysis for a comprehensive
and uniform credit and monitoring by way of the Health Code System, in banks,
which provided information regarding health of individual advances in 1985
86. It was considered that such information would be of immense use to banks

management for control purpose. Reserve Bank of India advises all
commercial banks on 7th November, 1987 to introduce the health classification
indicating the quality of individual advances in the following eight categories
with Health Code assigned to each borrower account.
1. Satisfactory: the account in which all terms and conditions are complying
with and safety of advances are not in doubt.
2. Irregular: the account where safety of advances is not suspected, though there
may be occasional irregularities.
3. Sick viable: advances to units which are sick but viable under nursing or
revival programs are under taken.
4. Sick non viable / sticky: advances where irregularities continue to persist
and there are no immediate prospects of regularization.
5. Advances recalled: advances where the recalled repayment is highly
doubtful and nursing is not considered worthwhile, includes accounts where
decision has been taken to recall the advances.
6. Suit file accounts: accounts where legal action or recovery proceedings
have been initiated.
7. Decreed debts: accounts for which decrees have been obtained.
8. Bad and doubtful accounts: the accounts in which the recoverability is in
doubtful due to shortfall in the value of the securities and inability /
unwillingness of the borrower to repay the banks dues partly or wholly.
4.2) Classification Of Assets:
Assets
Standard
assets
Sub-standard
assets
Doubtful assets
Source: www.accounting-simplified.com
Loss
assets

A. Standard Assets :A standard asset is an asset, which is not a non-performing asset. A
standard asset is one, which does not carry more that normal risk
attached to the business. Such an asset is not a non-performing asset and
is performing advance or a standard asset.
B. Sub Standard Asset:A sub standard asset is one which has remained a NPA for a period less
than or equal to 18 months.
C. Doubtful Assets:An asset is classified as doubtful asset if it has remained an NPA for a
period exceeding 18 months.
D. Loss Assets
A loss asset is one where loss has been identified by the bank or the
internal or the external auditor or the RBI inspection but the amount has
not been written off wholly.
4.3) Provisions of Norms

In order to narrow down the divergences and ensure adequate
provisioning by banks it suggested that a banks statutory auditors, if they so
desire, could have a dialogue with RBIs Regional Office/ inspectors who
carried out the banks inspection during the previous year with regard to the
accounts contributing to the difference.
Pursuant to this, offices were advised to forward a list of individual
advances, where the variance in the provisioning between the RBI and the bank
is above cut off levels so that the bank and the statutory auditors take into
account assessment of the RBI while making provisions for loan loss, etc
The primary responsibility for making adequate provision for any
diminution in the value of loan assets, investment or other assets is that of the
bank managements and the statuary auditors. assessment made by the statutory
auditors in taking a decision In regard to making adequate and necessary
provisions in terms of prudential guidelines.
In conformity with the prudential norms, provision should be made on
the non-performing asset on the basis of classification of assets into prescribed

an account becoming doubtful of recovery its recognition as such the realization
of the security and the erosion over time in the value of security charged to the
bank, the banks should make provision against sub-standard assets, doubtful
assets and loss assets as below:
A) Loss assets:The entire assets should write off after necessary from the
competent authority and as per the provision of the co-operative societies
Act/Rules. If the assets are permitted to remain in the books for any reason, 100
% of the outstanding should be provided for. In repent of an asset identified as a
loss asset, full provision at 100 % should be made if the expected salvage value
of the security is reliable.
B) Doubtful assets:
100% of the extent to which the advance is not covered by the realizable
value of the security to which the bank has a valid recourse and the realizable
value estimated on a realistic basis.
4.4) Provisioning Norms against NPAs:In order to improve the quality of assets and robust resilience of banks to
handle the future event of downturn and crisis, the provision norms have been
further tightened.
Accordingly, in additional to the existing prudential
guidelines to segregate the surplus provisions into a pool known as counter

cyclical buffer under the provision coverage ratio (PCR) to be reached to 70%
for non performing assets(NPAs) as per on dated sep 30, 2010, RBI has now
proposed to enhance the provisioning requirement on certain categories of
NPAs. As a result it can be observed that there is substantial rise in the quantum
of provision to be made against the NPAs. The total amount of additional
provision will have a bearing on the profit ability the banks. As such any
enhancement in the provision gives rise to different outcomes.
It will improve the quality of assets because logically banks will
strengthen the surveillance and monitoring mechanism to keep their provision
levels low to insure that their profit ability is not hurt. At the same time it will
improve the capacity of banks to avoid volatility therefore need to look at in

crisis lending to better stability ob banking sector banks therefore need to look
at in form the long term sustainability, threw in the short term, it make cut profit
pie.
A broader angle of interpretation and a proactive measure to streamline
credit appraisal and stronger monitoring. Mechanism can improve a sit quality
to eventually cut provision. Banks may have to closely follower health of their
borrowers and keep a watch on the movement of their credit ratings. The
measure speaks high of RBI concern to groom banks to take on higher volume
with better credit discipline as banks move toward higher growth trajectory.
4.5) Income Recognition Policy
The policy of income recognition has to be objective and based on the
record of recovery.
Income from non-performing assets (NPA) is not
recognized on accrual bases but is booked as income only when it is actually

received. Therefore, banks should not take to income account interest on nonperforming assets on accrual basis.
However, interest on advance against term deposit, NSCs, IVPs, KVPs
and life policies may be taken to income account on the due date, provided
adequate margin is available in the accounts.
Fees and commission earned by the banks as a result of re-negotiation or
rescheduling of outstanding debts should be recognized on the accrual basis
over the period of time covered by the re-negotiation or rescheduled extension
of credit.
If government guaranteed advanced become over due and thereby NPA
the entrust on such advances should not be taken to income account unless the
interest has been realized.
Reversal of income on accounts becoming NPAs:
If any advanced including bills purchased and discounted become NPA
as at the close of any year, interest accrued and credited to income account in
the corresponding previous year, should be reversed or provided for if the same
is not realized. This will apply to government Guaranteed accounts also.

Banks undertaking equipment leasing should follow prudential
accounting standards. Lease rentals comprise two elements-a finance charge
(i.e. interest charge) and towards recovery of the cost of the asset.
The interest component alone should be taken to income account,
before the asset become NPA, and remained unrealized should be reversed or
provided in the current accounting period.
4.6) Effect on profitability
The NPA problem is on of the foremost formidable problem that has
shaken the entire banking industry. The high level of NPA in banks and
financial institution has been a matter of grave concern to the public as bank
credit is the catalyst to the economic growth of the country and any bottleneck
in the smooth flow of credit, one cause for which is the mounting NPAs is
bound to create adverse repercussions in the economy.
The efficiency of a bank is not always reflected only by the size of its
balance sheet but by the level of return on its assets. NPAs do not generate
interests provisions for such for such NPAs from their current profits.
I.
Effects on Profitability
a) They erode current profits through provisioning requirement.
b) They result in reduced interest income. They require higher
c)
provisioning.
Requirement affecting profits and capacity to increase good quality risk
assets in future.
d) They limit recycling of funds.
e) Bank has to spend for making efforts for recovery such as expenses on
notice; follw-up and filing of civil suit& because of this expenses profit
get reduced.
f) This decline in profit has a bearings on variable like the capital to riskweighted asset ratio (CRAR) with of civil suit& because of this expenses
profit get reduced.
II.
Narrow banking

a) Narrow banking means only operation with the existing assets base &
not expanding
b) The business. If NPs are high RBI may ask a bank to do only narrow
banking.
c) RBI may impose adverse restriction on business of bank if NPA
percentage is very
d) High. For Example-Restriction on opening new branches, Expansion of
international operation may be curtain
III.
Effects on efficiency
a
When NPAs are very high all productivity ration of the bank such as
ROI (Return on Investment) Productivity per employee and profitability
ratios are adversely affected.

The most important business implication of the NPAs is that it lead to
the credit risk management assuming priority over other aspects of
banks functioning. The banks whole machinery would thus be preoccupied with recovery procedure rather that concentrating on
expanding business.
Implication can be psychological like play safe attitude and risk
aversion, lower moral and disinclination to take decision at all level of
staff in the bank.
4.7) Factors affecting rise in NPAs:

The banking sector has been facing the serious problem of the rising
NPAs. But the problem of NPAs is more in public sector banks when compared
to private sector banks and foreign banks. The NPAs in PSB are growing due to
external as well as internal factors.
1 External factor
The government has set of number of recovery tribunals, which works
for recovery of loan and advances. Due to their negligence and ineffectiveness
in their profitability and liquidity.
4.8) Principles of safety
By safety means that the borrower is in a position to repay the loan both
principles an interest.The repay of loan depends upon the borrowers.

Capacity to pay
a
Willingness to pay
a) Capacity to pay depend upon:

1 Tangible assets
2 Success in business
Willingness to pay depends on:
1
2
3
Character
Honest
Reputation of borrower
The banker should, therefore take out must care in ensuring that the
enterprise or business for which a loan is sought is a sound one and the
borrower is capable of carrying it out successfully he should be a person of
integrity and good character.
Inappropriate Technology
Due to in appropriate technology and management information system,
market driven decision real time cant be taken. MIS and financial accounting
system is not implemented in the bank which leads to poor credit collection,
thus NPA all the branches of the bank should be computerized.
Analyze the balance sheet:
True picture of business will be revealed on analysis of profit/loss/a/c and
balance sheet.
Purpose of the loan
When bankers give loan, they should analyze the purpose to the loan. To
ensure safety and liquidity, banks should grant loan for productive purpose only
should analyses the profitability, viability, long term ace tabooed of the project
while financing.
4.9) Poor credit appraisal system:

Poor credit appraisal is another factor for the fire in NPAs. Due to poor
credit appraisal; the bank gives advances to those who are not able to repay
back. They should use good credit appraisal to decrease the NPAs.
The banker should always select the borrower very carefully and should
take tangible assets as security to safe guard its interest. When accepting
securities banks should consider the
1
2
3
4
Marketability
Accepting
Safety
Transferability
4.10) Process of NPA Recovery:Every bank in order to recover the dues has a recovery process set for
them. The usual legal recovery process adopted by the bank in the following
nature.
Legal Process of Recovery
Personal visit to the
Borrower
Notice to
Guarantors
Authority Letter to
lawyer
Demanding amount through
notice
Receiving amount
from client
Not receiving
amount
File case in court
Debit note for

expenses
Recovery expenses
Completion of
Lawyers argue
P. R. Patil College of Engineering & Technology, Amravati before issuing
Stopped recovery
process after
receiving
Argument in court
if court satisfied,
issue
Police station
serving the
summons to
Chapter 5
DATA ANALYSIS& INTERPRITATION
5.1) Introduction:
The process of evaluating data using analytical and logical reasoning to
examine each component of the data provided. This form of analysis is just one
of the many steps that must be completed when conducting a research
experiment. Data from various sources is gathered, reviewed, and then analyzed
to form some sort of finding or conclusion. There are a variety of specific data
analysis method, some of which include data mining, text analytics, business
intelligence, and data visualizations.
Analysis of data is a process of inspecting, cleaning, transforming, and
modeling data with the goal of discovering useful information, suggesting
conclusions, and supporting decision-making. Data analysis has multiple facets
and approaches, encompassing diverse techniques under a variety of names, in
different business, science, and social science domains.
Data mining is a particular data analysis technique that focuses on
modeling and knowledge discovery for predictive rather than purely descriptive
purposes. Business intelligence covers data analysis that relies heavily on
aggregation, focusing on business information. In statistical applications, some
people divide data analysis into descriptive statistics, exploratory data analysis
(EDA), and confirmatory data analysis (CDA). EDA focuses on discovering
new features in the data and CDA on confirming or falsifying existing
hypotheses. Predictive analytics focuses on application of statistical models for

predictive forecasting or classification, while text analytics applies statistical,
linguistic, and structural techniques to extract and classify information from
textual sources, a species of unstructured data. All are varieties of data analysis.
Data integration is a precursor to data analysis, and data analysis is
closely linked to data visualization and data dissemination. The term data
analysis is sometimes used as a synonym for data modeling.
5.2) Balance Sheet of Central Bank of India

Mar '14
12 mths
Mar '13
12 mths
Mar '12
12 mths
Capital and Liabilities:

Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Net Worth
Deposits
2,661.58
1,044.58
0.00
1,617.00
12,651.27
15,312.85
226,038.3
2,353.12
736.12
0.00
1,617.00
8,201.45
10,554.57
196,173.3
2,021.14
404.14
2,025.68
1,617.00
4,898.15
8,944.97
179,356.0
Borrowings
Total Debt
1
18,305.51
244,343.8
3
12,919.60
209,092.9
2
12,887.98
192,244.0
Other Liabilities & Provisions

Total Liabilities
2
8,472.87
268,129.5
3
8,255.29
227,902.7
0
6,639.93
207,828.9
4
Mar '14
12 mths
9
Mar '13
12 mths
0
Mar '12
12 mths
Assets
Cash & Balances with RBI
Balance with Banks, Money at Call
Advances
13,560.17
532.04
171,935.8
13,114.18
1,012.42
147,512.8
14,081.99
1,200.81
129,725.4
Investments
Gross Block
Revaluation Reserves
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
4
72,603.79
2,684.75
0.00
0.00
2,684.75
0.00
6,812.95
268,129.5
5
59,243.27
3,770.80
1,896.96
1,296.89
576.95
0.00
6,443.11
227,902.7
1
54,504.49
3,559.31
1,928.43
1,133.93
496.95
0.00
7,819.24
207,828.8
Contingent Liabilities
Bills for collection
Book Value (Rs)
4
46,881.78
18,732.82
131.11
8
50,885.06
14,183.44
121.42
9
36,569.78
9,755.78
131.20
5.3) Result of central Bank of India

Mar '14
Mar '13
Mar '12
16,957.3
14,439.4
11,267.8
7
4,778.97
79.68
80.74
1,676.67
0
4,347.83
339.35
42.35
1,409.37
5
3,767.36
33.37
205.58
1,239.49
16,140.9
13,986.0
9,897.57
Employees Cost
Other Expenses
Depreciation
Operating Profit before Provisions
0
2,895.22
1,344.77
-3,192.54
5
2,509.04
1,246.66
-2,836.55
2,965.80
1,039.12
-2,611.16
and contingencies
Provisions And Contingencies
Exceptional Items
P/L Before Tax
Tax
P/L After Tax from Ordinary
1,850.95
-1,341.59
311.47
1,030.12
2,169.57
112.38
779.36
232.95
546.41
932.23
-1,678.93
411.09
1,267.84
Activities
Prior Year Adjustments
Extra Ordinary Items
Net Profit/(Loss) For the Period
Minority Interest
Share Of P/L Of Associates
Net P/L After M.I & Associates
Equity Share Capital
Reserves Excluding Revaluation
--1,030.12
-4.08
41.34
1,067.38
1,044.58
11,009.2
--546.41
-2.32
69.28
613.37
736.11
8,412.28
--153.09
1,114.75
-3.80
50.42
1,161.37
404.14
5,029.60
8
--
--
--
85.31
11.33
11.49
79.15
11.96
12.40
80.20
10.74
11.64
11.94
11.94
7.20
7.20
25.43
25.43
Interest Earned
(a) Int. /Disc. on Adv/Bills
(b) Income on Investment
(c) Int. on balances With RBI
(d) Others
Other Income
EXPENDITURE
Interest Expended
Reserves
Equity Dividend Rate (%)
ANALYTICAL RATIOS
a) % of Share by Govt.
b) Capital Adequacy Ratio - Basel -I
c) Capital Adequacy Ratio - Basel -II
EPS Before Extra Ordinary
Basic EPS
Diluted EPS

EPS After Extra Ordinary
Basic EPS
Diluted EPS
NPA Ratios :
i) Gross NPA
11.94
11.94
7.20
7.20
25.43
25.43
8,456.18
7,273.46
23,945.3
ii) Net NPA

4,987.55
i) % of Gross NPA
4.80
ii) % of Net NPA
2.90
Return on Assets %
0.44
Public Share Holding
No Of Shares (Lakhs)
15.35
Share Holding (%)
14.69
Promoters and Promoter Group Shareholding
a) Pledged/Encumbered
- Number of shares (Lakhs)
-- Per. of shares (as a % of the total
--
4,556.77
4.83
3.09
0.26
0
8,472.90
1.82
0.65
0.70
15.35
20.85
8.00
19.80
---
---
sh. of prom. and promoter group)

- Per. of shares (as a % of the total
--
--
--
Share Cap. of the company)

b) Non-encumbered
- Number of shares (Lakhs)
89.11
100.00
58.26
100.00
32.41
100.00
sh. of prom. and promoter group)

85.31
79.15
80.20
|201303
|201203
|201103
Share Cap. of the company)

Notes
5.4) Data Analysis:
Total NPAs for:
Table: 5.1
(Rs.In Lakhs)
Year
Amount
2011-12
847.29
2012-13
4556.77
2013-14
4987.55
Graph 5.1

4987.55
4556.77
5000
4500
4000
3500
3000
2500
2000
1500
847.29
1000
500
0
2011-12
2012-13
2013-14
(Source: Secondary Data)

Interpretation:
From the above graph, the NPA showing the highest position in the last
three year in 2013-14. But it is very much harmful to the bank position is less
NPA is better for the banks.
Calculation of NPA ratio during year 2011-12, 2012-13, 2013-14

Year-2013-14
Net NPA = 4987.55
Loan
= 178748.79
NPA ratio= Net NPA

Loan
4987.55
= 0.0280
178748.79
Year-2012-13
Net NPA = 4556.77
Loan
= 6443.11
NPA ratio= Net NPA

Loan
=
4556.77
6443.11
= 0.707
Year-2011-12
Net NPA = 847.29
Loan
= 7819.24
NPA ratio= Net NPA

Loan
=
847.29
7819.24
= 0.108
Table no. 5.2: NPA ratio during 2011-12, 2012-13, and 2013-14
Year
NPA ratio
2011-12
0.108

2012-13
0.707
2013-14
0.0280
Graph No. 5.2: NPA ratio during 2011-12, 2012-13, and 2013-14
NPA ratio
0.71
0.8
0.7
0.6
0.5
0.4
0.3
0.11
0.2
0.03
0.1
0
2011-12
2012-13
2013-14

Interpretation:
In this graph the NPA ratio are shows, the NPA ratio shows the postion
of the firm or bank, less NPA ratio is better & more NPA ratio is Harmful to the
firms. In the above graph, the better position show in the year 2013-14, but it
was very high in the year 2012-13. In the year 2011-12 it was same as near
about the position in the year 2013-14.
Calculation of Gross NPA ratio during year 2011-12, 2012-13, 2013-14
Year-2013-14
Gross NPA = 8456.18
Gross Adv. = 172321.94

Gross NPA = Gross NPA *100
Gross Adv
=
8456.18
*100
= 4.91%
172321.94
Year-2012-13
Gross NPA = 7273.46
Gross Adv. = 147718.08
Gross Adv
=
7273.46
*100
147718.08
= 4.92%
Year-2011-12
Gross NPA = 2394.53
Gross Adv. = 129840.57
Gross Adv
= 2394.53
129840.57
*100
= 1.84%
Table no. 5.3: Gross NPA ratio during 2011-12, 2012-13, 2013-14
Year
Gross NPA ratio
2011-12
4.91

2012-13
4.92
2013-14
1.84
Graph No. 5.3: Gross NPA ratio during 2011-12, 2012-13, and 2013-14
Gross NPA ratio

4.91
4.92
5
4.5
4
3.5
3
2.5
1.84
2
1.5
1
0.5
0
2011-12
2012-13
2013-14

Interpretation:
The Gross ratio shows the position of the firm. From the above graph it
is interpreted that bank gross NPA ratio in the year 2011-12 was 4.91, and then
increase in the NPA in the year 2012-13 was 4.92 2012-13 and in the year 1.84.
Year wise analysis:

5.2) Total Deposits and Advance:
Table 5.4

Year
2011-12
2012-13
2013-14
Deposits
79378.55
196235.32
226279.07
Advances
129840.57
147718.08
172321.94
Graph 5.4
250000
226279.07
196235.32
200000
172321.94
147718.08
150000
129840.57
100000
79378.55
50000
0
2011-12
2012-13
Depos its
2013-14
Advances
(Source: Secondary data)

Interpretation:
In the above graph, the relation of loan to advances shows relation
between each other.It is to be interpreted that in the year 2013-14 the maximum
deposits and advances was granted by bank, in the year the advances was
172321.94 & deposits was 226219.07. Other two years having less deposits and
advances
Advance during year 2010-11

Table: 5.5
Type of Loan
Home loan
( Rs. In Lakhs)
Amount
207.56

Car loan
Personal Loan
Two wheeler loan
47.38
478.56
38.6
14.67
Graph no. 5.5

600
478.56
500
400
300
200
207.56
100
47.38
38.6
14.67

Interpretation:
In the above graph the various loans provided to the customers listed
with their amount per year.It is to be interpreted that in the year 2010-11 the
maximum loan was granted by bank for personal loan about Rs. 478.56 lakhs,
then secondly the home loan was granted, i.e. 207.56 lakhs, for car loans, it was
47.38 lakh issued, 38.6 lakh commercial vehical loans issued and minimum for
two wheeler loan about Rs. 14.67 lakhs.
.5.6) Advance during year 2011-12:
Table: 5.6
( Rs. In Lakhs)
Type of Loan
Amount
Home loan
167.34

Car loan
105.89
Personal Loan
306.75
55.90
Two wheeler loan
79.8
Graph: 5.6
350
306.75
300
250
200
167.34
150
105.89
100
54.9
50
79.8

Interpretation:
maximum loan was granted by bank for personal loan about Rs. 306.75 lakhs,
then secondly the home loan was granted, i.e. 167.34 lakhs, for car loans, it was
105.89 lakh issued, 79.8 lakh two wheeler loans issued and minimum for
commercial vehical loans about Rs. 14.67 lakhs.
5.7) Advance during year 2012-13:
Table: 5.7
Type of Loan
( Rs. In Lakhs)
Amount

Home loan
647.45
Car loan
126.5
Personal Loan
229.12
68.31
Two wheeler loan
208.07
Graph: 5.7
700
647.45
600
500
400
300
229.12
200
126.5
100
208.07
68.31

Interpretation:
maximum loan was granted by bank for home loan about Rs. 647.45 lakhs, then
secondly the personal loan was granted, i.e. 229.12 lakhs, for car loans, it was
126.5 lakh issued, 126.5 lakh car loans issued and minimum for commercial
vehicle loan about Rs. 68.31 lakhs.
5.8) Advance during year 2013-14:
Table: 5.8
( Rs. In Lakhs)

Type of Loan
Amount
Home loan
448.56
Car loan
201.39
Personal Loan
59.89
103.67
Two wheeler loan
19.10
Graph: 5.8
500
450
448.56
400
350
300
250
201.39
200
150
103.67
100
59.89
50
19.1

Interpretation:
maximum loan was granted by bank for home loan about Rs. 448.56 lakhs, then
secondly the car loan was granted, i.e. 201.39 lakhs, for commercial vehicle
loans, it was 47.38 lakh issued, 59.89 lakh personal loan issued and minimum
for two wheeler loan about Rs. 19.1 lakhs.
5.9) THE TOTAL LOAN SANCTION IN THE LAST FOUR YEARS
Table 5.9: Home Loan sanction
Sr. No.
1
2
3
Year
2013-14
2012-13
2011-12
Sanction Amount
5018.56
6157.48
1667.43
Graph 5.9: Home Loan sanction
Home loan Sanction Amount

7000
6157.48
6000
5000
5018.56
4000
3000
1667.43
2000
1000
0
2013-14
2012-13
2011-12

Interpretation:
The above data shows the year wise home sanction amount, it is to be
interpreted that maximum 6157.48 loan sanction in 2012-13, then secondly
5018.56 in the year 2013-14, in the year 2011-12 it was 2071.65.
Table no 5.10: Car Loan sanction
Sr. No.
Year
Sanction Amount

1
2
3
2013-14
2012-13
2011-12
1851.39
1265.12
1051.98
Graph no. 5.10: Car Loan sanction
Car loan Sanction Amount

2000
1851.39
1800
1600
1400
1265.12
1200
1051.98
1000
800
600
400
200
0
2013-14
2012-13
2011-12

Interpretation:
The loan amount related with the growth of the related institutions, and
it will be higher, the position of the institution will be better, maximum car loan
sanction amount recorded in the year 2013-14, 1265.12, in the 2012-13, and
1051.98 in the 2011-12.
Table no 5.11: Personal Loan Sanction

Sr. No.
1
2
3
Year
2013-14
2012-13
2011-12
Sanction Amount
603.98
2180.91
3117.75
Graph no 5.11: Personal Loan Sanction
Personal loan Sanction Amount

3500
3117.75
3000
2500
2180.91
2000
1500
1000
603.98
500
0
2013-14
2012-13
2011-12

Interpretation:
Personal loan are taken by the customers are shown in the above
graph;personal loan was 2180.91 in the 2012-13, 3117.75 in the 2011-12 and
603.98 in the 2013-14.
Table no. 5.12: Commercial Loan Sanction

Sr. No.
1
2
3
Year
2013-14
2012-13
2011-12
Sanction Amount
1137.67
679.83
540.09
Graph no. 5.12: Commercial Loan sanction
Commercial loan Sanction Amount

1200
1137.67
1000
800
679.83
540.09
600
400
200
0
2013-14
2012-13
2011-12

Interpretation:
Commercial vehicle loan was sanction in the year last three year are
shown in the above graph, and interpretation was drawn thatmaximum 1137.67
in the year 2013-14, 679.83 in the 2012-13, and 540.09 in the 2011-12.
Table no 5.13: Two wheeler Loan sanction

Sr. No.
1
2
3
Year
2013-14
2012-13
2011-12
Sanction Amount
201.15
2280.07
798.00

Graph no 5.13: Two wheeler Loan sanction
Two wheeler loan Sanction Amount

2500
2280.07
2000
1500
1000
500
798
201.15
0
2013-14
2012-13
2011-12

Interpretation:
Above graph shows the sanction amount of the two wheeler loan in the
last three years,maximum 2280.07 in the year 2012-13, 798 in the 2011-12, and
201.15 in the 2013-14.
Chapter 6
FINDINGS, CONCLUSIONS & SUGGESTIONS
6.1) FINDINGS:
1. As the deposits were maximum than the advances for the respective 3 years.

2. As per the above analysis, it is found that proportions of defaulters are going
to decreasing in 2013-14.
3. In the study of three years of performance of the bank, it is found that the
NPAs level is continuously going to decrease path.
4. From the year 2011-12, NPAs level was higher which going to reduce for the
next 2 years tremendously. Which it shows the good sign of bank and from
that concluded that bank following the policy to manage the NPAs level is
about effective and best to the performance of bank.
5. From above analysis the maximum of NPAs found in loan like home loans, car
loans and personal loan from year 2011 to 2014.
6. Gross & Net terms exist only in India.
7. The banks overall performance in the year 2011-12 and 2012-13 is better as
compared to the previous years in all the aspects i.e. in profit, decrease in NPA
level etc.
8. Net NPAs of CBI bank are likely to reduce over next 3 Years than the gross
NPAs.
9. It is found that the drastic growth in NPAs from year 2010-11.
10. Overall NPAs in CBI bank as % of advances is in decreasing trend, through
the NPAs is the absolute term is increasing.
11. Due to compulsory lending to the priority sector, NPAs are more in CBI bank.
12. The recovery of nonperforming assets is slow due to the sluggish legal system
prevailing in India.
13. Recognition of an account becoming an NPA is not done in time.
14. Not proper credit appraisal.
15. Even after providing recapitalization facility by the government to the weak
banks, not much change has been observed in the performance of the bank.
6.2) CONCLUSIONS:
1. Management of NPA is the need of the hour. To be effective, NPA
management has to be an exercise pervading the entire bank from the board
down the last level. Time is of prime essence in NPA management. The course
open to the banker is to ensure that an asset does not become NPA. If it does,
he should take steps for early recovery failing which the profitability of the
bank will be eroded. That can trigger other problems to undermine the banks
financial conditions.

2. To conclude with till recent past, corporate borrowers even after defaulting
continuously nearer had any real fear of bank taking any action to recover
their dues despite the fact that there entire assets where hypothecated to the
bank. This is because there was no legal act framed to safeguard the real
interest of the bank.
3. In this study conclusion was drawn that, Central bank of India like to be tried
to get decreases as compare to past years.
4. In this research study, conclusion was drawn that, for managing NPA, bank
issues more loan as compare to last years.
5. The suitable NPA for the bank is recorded in the year 2013-14, it is good for
the bank that continuous progressing in NPA.
6. NPA ratio was also good in the year 2013-14 and in the progress steps in
further years.
7. Gross NPA ratio was recorded in the year 2013-14 was
8. In the year wise analysis of the loans & advances, most of the loans &
advances recorded in the year 2013-14.
9. In the loan wise data, the conclusion was drawn that, personal wise maximum
issued in the 2010-11.
10. During the year 2011-12, home loan was issued maximum.
11. During the year 2012-13, home loan was maximum issued as compared to
other loans in that year.
12. The home loan was issued in maximum in the year 2013-14.
13. During the last three years home loan sanction details are given, and 2013-14
home loan was sanction maximum.
14. In car loan section, maximum loan was sanction in the year 2013-13.
15. Personal loan was sanction maximum in the year 2011-12.
16. During the study, the conclusion was drawn that, commercial loan sanction
amount was more in the year 2013-14.
17. In this research process, conclusion was drawn that, in 2012-13 maximum two
wheeler loan sanction.
6.3) SUGGESTIONS:
1. The bank must take great care while granting of car loan, personal loan, home
loan and two wheeler loans.
2. The security of the proposal should be done considering all the point and
related aspects.
3. The security and the financial position must be given due importance.
4. The system of MPBF is a good one. It must be followed to reduce the risk on
losses.
5. After granting a loan the frequent follow up must be taken by bank or frequent
visit must be given to the clients, borrowers.
6. The assets given as a mortgage must be properly valued. Not overvalued or
undervalued.
7. During granting loan bank should analyze borrowers financial condition.
8. Banks have to find out the original reason for the loan.
BIBLIOGRAPHY
BOOKS:
1) Punithavathypandian:- Security analysis and

Portfolio management
2) Khan &jain :- Financial Management
WEBSITES:
www.wikipedia.org
www.moneycontrol.com
www.cbi.com
MAGZINES:
Business Today

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A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

The casual explanation

politicalInterface, willful defaults, targeted lending and even fraudulent

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

than 90 days in respect of a Term Loan

respect of an overdraft / cash credit(OD/CC),

1.2) Review of Literature:

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

1.3) Definition of Problem:

1.4) Objective of study:

1.5) Scope of study:

A Study Of NPA Management of Central Bank of India

Central Bank of India, Mumbai

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

A Study Of NPA Management of Central Bank of India

A Study Of NPA Management of Central Bank of India

A Study Of NPA Management of Central Bank of India

2.4 LOGO OF BANK

2.5) Products and Services offered by Bank

A Study Of NPA Management of Central Bank of India

It comprises of both, principal

repayment and interest payment.

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

Partnership Firms, societies & Companies

Loan up to Rs. 10nlakhs.

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

COMMERCIAL VEHICLE LOANS

The loan depends on applicants requirement

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

collect information and data for

The methodology may

includepublicationresearch,interviews,surveys and other research techniques, and

3.2) Research Design:

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

3.3) Sources of Data Collection:

3.4) Tools of Data Evolution:

A Study Of NPA Management of Central Bank of India

P. R. Patil College of Engineering & Technology, Amravati

A Study Of NPA Management of Central Bank of India

A Study Of NPA Management of Central Bank of India

4.3) Provisions of Norms

A Study Of NPA Management of Central Bank of India

Accordingly, in additional to the existing prudential

guidelines to segregate the surplus provisions into a pool known as counter

A Study Of NPA Management of Central Bank of India