CUSTOMER

SATISFACTION

PRESENTED BY
MOHMAD iqbal mir
Regd. No. 10908459
RT1902 B-66
FEW FACTS ABOUT J & K BANK

 Founded--------------------------1938
 Headquarters-------------------Jammu & Kashmir, India
 No. of Locations----------------580 branches/offices
 Industry---------------------------Financial, Commercial Bank
 Employees-----------------------7500
 Website---------------------------http://www.jkbank.net
 SHAREHOLDING PATTERN 2010
RESIDENT INDIVIDUALS
10%
BODIES CORPORATES
1%

FOREIGN INST. INVESTORS GOVERNMENT OF J&K

32% 53%

NON RESIDENT INDIANS

0%
INSURANCE COMPANIES
1%
INDIAN MUTUAL FUNDS
2%
 UNIQUE CHARECTERISTICS:
 First in India as a state owned bank
 Private sector Bank despite government holding 53 per cent of equity.

 Sole banker and lender of last resort to the Government of J & K.

 Plan and non -plan funds, taxes and non-tax revenues routed through
the bank.
 Salaries of Government officials disbursed by the Bank.

 Only private sector bank designated as agent of RBI for banking.

 Carries out banking business of the Central Government.

 Collects taxes pertaining to Central Board of Direct Taxes in J & K.

{
WHAT THIS LOGO
SIGNIFIES?
 RED SIGNIFIES THE ENERGY & POWER.

 BLUE REPRESENTS THE STABILITY & UNITY.

 WHILE GREEN SYMBOLISE THE GROWTH &

RENEWALS.
FINANCIAL PERFORMANCE
PARTICULERS 31.03.10 (crores) 31.03.09 (crores)
CAPITAL AND RESERVES 2622.86 2574.37
PROFIT 409.83 360
DEPOSITS 33004.10 28593.26
CASH AND BALANCE WITH RBI 2302.95 3219.96
ADNACES 20930.41 18882.61
FIXED ASSETS 199.41 192
NPA’S 287.51 203.55
PERFORMING ASSET,..
 An account (loan or investment) is classified as
Performing Asset if it does not disclose any
problems and carry more than normal risk
attached to the business

 All loan facilities which are regular !

CLASSIFICATION OF ASSETS.
 PERFORMING ASSETS.
STANDARD ASSETS

 NON PERFORMING ASSETS

1. Sub-Standard Assets
2. Doubtful Assets
3. Loss Assets
FUNDAMENTAL CAUSES FOR NPA’S
 Willful default

 Lack of competitive advantage

 Lack of adequate risk assessment

 Time or cost overrun while implementing the

project.

 Internal factors

 External factors
 RECOVERY TOOLS OF NPA’S

 Debt recovery tribunals.

 Lok adalts.

 Asset reconstruction company.

 Revenue recovery act.

 OBJECTIVES OF STUDY
 To study the practice of managing Non Performing
Assets in general.

 To understand how Non- Performing Asset affect the

performance of the bank.

 To understand the extent to which Jammu & Kashmir

Bank has been successful in cutting
down its Non-performing Asset level.

 To offer suggestions and recommendations to

manage the Non-Performing Asset
 NEED FOR THE STUDY
 The need for the study is to identify the bank’s impact on
profitability due to non performing asset to identify the
various causes for NPA’S and ways to reduce NPA.

 The need is to identify NPA’S in the branches of J & K

bank and the methods adopted by J & K bank to reduce
the same.
 LIMITATIONS OF STUDY
 Due to time constraint depth analysis could not be
made.
 The data taken for interpretation is for a limited
period.
 The study is confined to only one company i.e. J &
K bank and that too the ANANTNAG region only.
 RESEARCH METHODOLOGY

Research Design: Descriptive

Source Of Data
Primary and Secondary
Sampling Design (random)
Sample unit= Branch managers of
Anantnag region
Sample size=10
DATA COLLECTION,PREPARATION
AND ANALYSIS
DATA COLLECTION METHOD

 Primary sources of data.

 Secondary sources of data.

DATA ANALYSIS
Tabulation
Percentages and Averages

Graphs and Pi charts

 Table Showing period of function of branch

Years No of respondents Percentage

2 years 0 0
2-3 2 20
3-5 3 30
5 years & above 5 50

Total 10 100

Analysis:
We can observe that 50% of branches are functioning since 5 years & all other branches are functioning from a
minimum period of 2-3 years.
Inference:
The above table shows that most of the branches of J&K Bank have been functioning since 5 years and above.
Hence the management is looking forward for the maintenance of the present branches.

Graph 5.1 Showing period of

functioning of Branches

60
P e r c e n ta g e

50
50
40
30
30 Percentage
20
20
10
0
0

Years
 Table 5.2 Showing presence of NPA

Years No of respondents Percentage

0-1 1 10
1-2 1 10
2-3 2 20
3-4 2 20
5 & above 4 40
Total 10 100

Analysis:
From the above table it can be interpreted that in nearly 40% of branches NPAs are present since 5 years and above. And
in 20% of branches NPAs are present between 3-4 years. And in rest of branches NPAs are present from 3 years.
Inference:
NPAs are present maximum in those branches which have been performing since 5 years and above, it can also be
observed that NPAs are present in all branches of J&K Bank.

Graph 5.2 Showing presence of NPAs

45 40
P e rc e n ta g e

40
35
30
25 20 20 Percentage
20
15 10 10
10
5
0

Years
 Table 6.3 showing approximate value of NPAs in branches

Amount in lakhs No. of respondents Percentage

0-10 1 10
10-20 2 20
20-30 1 10
30-50 3 30
50 & above 4 40

Total 10 100

Analysis:
From the above table it can be interpreted that in nearly 40% branches NPAs are above 50 lakhs. Another 30% of
branches have NPAs of about 30-50 lakhs & in rest of branches NPAs upto 30 lakhs are found.
Inference:
The branches of the bank have NPAs to quite a large extent. NPAs above 50 lakhs have been found in 4 branches out of
10 branches.

Graph 5.3 Showing Approximate Valuie of

NPAs in Branches
P e rc e n ta g e

45
40
35
30
25
Percentage
20
15
10
5
50 & above
3 0 -5 0
1 0 -2 0

2 0 -3 0

0
0 -1 0

Amount in Lakhs
 Table 5.4 Showing total amount of NPAs in different categories of loan accounts

Type of loan Total Percentage

borrowed

Personal loan 3,06,00,000 46.27

Vehicle loan 60,35,000 9.12
Housing loan 2,65,00,000 40.06
Others 30,00,000 4.53

Total 6,61,35,000 100

Analysis:
We can observe that in personal loan category more NPAs are found i.e. RS 3, 06, 00,000 followed by housing loan with an
amount of RS 2, 65, 00,000 than the vehicle loan & others.
Inference:
It is observed that personal loan is having more NPAs followed by housing loan & vehicle loan.

Graph 5.4 showing total amount of NPAs in

different categories of loan accounts

4.53

Personal loan

46.27
Vehicle loan
40.06

Housing loan

Others

9.12
 Table 5.5 showing the main causes of NPAs

S.No Causes 5 4 3 2 1 Total Weighted Weighted

. respondent total average
s
1 Improper selection 1 0 1 0 2 4 10 2.5
of borrowers
2 Deficiency in 1 0 1 3 1 6 15 2.2
processing
3 Improper appraisal 0 1 0 1 3 5 9 1.8
of assets
4 Lack of 0 1 0 1 1 3 7 2.33
supervision in
follow up
5 Natural calamities 0 0 0 0 0 0 0 0
6 Willful default 1 3 0 2 0 6 21 3.5

ANALYSIS:
We can observe that the willful default is the major cause of NPA formation with a highest average of 3.5 followed by
improper selection of borrowers and deficiency
a weighted average of 2.5 each, and then lack of supervision and follow up with a weighted average of 2.33 and then
improper appraisal of assets with weighted average of 1.8
INFERENCE:
It can be observed that willful default is the main cause of NPA formation in the bank followed by improper selection of
borrowers.
 Table Showing the NPA encountered for each of the causes

Causes Weighted
Average
Improper selection of borrowers 2.33
Deficiency in processing 2.75
Improper appraisal of assets 2.16
Lack of supervision and follow up 3
Natural calamities 0
Willful default 2.14

ANALYSIS:
We can observe that the Lack of supervision and follow up is the main cause with weighted average of 3, followed by
deficiency in processing with a weighted average of 2.75, followed by improper appraisal of assets with weighted
average of 2.33.
INFERENCE:
It can be observed that Lack of supervision and follow up and deficiency in processing are the main causes for such
huge NPAs encountered in the bank.

Graph 5.6.2 showing NPA encountered for each of these causes

3.5 3
3 2.75
2.33
weighted Average

2.5 2.16 2.14

2 Weighted
1.5 Average
1
0.5 0
0
Improper Improper Lack of
selection of Deficiency appraisal of supervision Natural Willful
borrowers in assets and follow calamities default
processing up
Causes
 Table Showing NPA level controllable

Result No. of Respondents Percentage

Definitely Yes 5 50
Yes 4 40
Can’t say 1 10
No 0 0
Definitely No 0 0
TOTAL 10 100

ANALYSIS:
From the above table, it can be interpreted that nearly 50% of respondents have told that definitely NPAs can be controlled
and another 40% respondents say that NPAs can be controlled, while 10% of respondents could not make any decision.
INFERENCE:
It can be observed that respondents are sure that NPAs can be controlled and reduced.

Graph 5.7 showing NPA level

controllable
P e r c e n ta g e

60 50
50 40
40
30 Percentage
20 10
10 0 0
0

Respondents Response
 Table 5.8 Showing effective measures to reduce the NPAs

Measures Weighted
Average
Constant dialog with the borrowers 4.42
Perfect documentation 4.5
Recovery camps 4.33
Staff involvement 4.63
SARFAESI Act 3.66
Lok Adalats 3
Debt Recovery Tribunals 2
ANALYSIS:
We can observe that staff involvement is the most effective measure taken by the bank to reduce NPA level with a
weighted average of 4.63, perfect documentation is another effective measure with a weighted average of 4.5 and followed
by others like constant dialogue with borrowers and Recovery camps with weighted average of 4.42 and 4.33 respectively.
INFERENCE:
It can be observed that staff involvement is the most effective measure taken by the bank to reduce the NPA level in the
Bank

Graph 5.8 showing effective measures to reduce the NPAs

4.42 4.5 4.33 4.63

5
3.66
4 3
Weighted Average

3 2 Weighted Average
2
1
0
Recovery

involvement

Lok
camps

Staff

Debt
Adalats

Recovery
Tribunals
documentation
dialog with the

Perfect

SARFAESI Act
Constant

borrowers

Measures
 Table 5.9 Showing NPAs converted into good assets

Result (%) No. of respondents Percentage

1 0 0
2 1 10
3 1 10
4 2 20
5 2 20
>5 4 40
TOTAL 10 100

ANALYSIS:
From the above table, it can be interpreted that 40% of NPA have been converted into good assets to the extent of 5% or
more.
INFERENCE:
The Bank is controlling the level of NPA and converting the NPAs into good assets by effective implementation of NPA
reduction techniques.

Graph 5.9 showing NPAs converted

into Good Assets

50
40
P e r c e n ta g e

40
30
20 20 Percentage
20
10 10
10
0
0
1% 2% 3% 4% 5% >5%
Percentage of NPAs converted
into Good Assets
 Table 5.10 Showing the extent to which profits are affected by NPA

% of profit affected by No. of respondents Percentage

NPA
0-5 4 40
5-10 3 30
10-20 2 20
20 & above 1 10
TOTAL 10 100

ANALYSIS:
We can observe that 40% of respondents have told that profitability is affected to the extent of 0-5% due to NPA and other
30% respondents think that profitability is affected to the extent of 5-10% while other 20% of respondents think that
profitability is affected to the extent of 10-20% and the remaining 10% of respondents think that profitability is affected to
the extent of more than 20%.
INFERENCE:
It is observed that NPAs affect the profitability to a considerable extent.

Graph 5.10 showing the extent to which profits are affected

by NPA.

45 40
40
P e r c e n ta g e

35 30
30
25 20 Percentage
20
15 10
10
5
0
0-5 5-10 10-20 20 & above
Percentage of profit affected by NPA
 Table: 5.11 Showing improvement in profitability after adopting NPA reduction techniques.
Result No. of respondents Percentage
Definitely improved 5 50

Improved 3 30

Can’t Say 1 10

Not improved 1 10

Definitely not 0 0
improved
TOTAL 10 100

ANALYSIS:
In the above table, it can be interpreted that 50% of respondents say that profitability has been improved after adopting NPA
reduction Techniques & 10% of respondents say that profitability has not been improved while the remaining 20% of
respondents could not make any decision.
INFERENCE:
The bank successfully reduced the level of NPAs by NPA reduction techniques.

Graph 5.11 showing improvement in

profitability after adopting NPA reduction
techniques
10
0

10
Definitely improved
50 Improved

Can’t Say

Not improved
30
Definitely not
improved
 FINDINGS OF THE STUDY

•NPA is observed in all branches of Jammu & Kashmir Bank Limited.

•The main causes for NPA is willful default, followed by improper selection of borrowers and
then lack of supervision and follow up.

•Personal loan constitutes for nearly 46.27% of the total NPA, housing loan constitutes
40.06%, vehicle loan constitutes 9.12% of the total NPA and others constitute 4.53%.

•It can be observed that 50% of respondents agree that NPA can be controlled, & within this
40% are highly confident that NPAs can be controlled.

•We can observe that majority of respondents say that staff involvement in the processing
helps to reduce the NPAs and other respondent’s feel that proper documentation helps in
reducing NPA.

•The Bank has converted NPA to good assets in few branches.

•In 4 branches NPA have value more than 50 lakhs and in 3 branches NPA is more than 30
lakhs and in others more than 10 lakhs.
 CONCLUSION:

The problem of non-performing assets has been a major issue for the banking industry. The
RBI which is the apex body for controlling the level of non-performing assets has been
giving guidelines and getting norms for the banks in order to control the incidents of
defaults. This study on management of non-performing assets with specific reference to
J&K bank was conducted, to find out the reasons for the incidence of non-performing
assets and how public sector banks managed it and its effect on performance of the bank.

•The NPA of Jammu & Kashmir Bank Limited was studied and it was observed that all
branches of bank had NPA.

•The study revealed that the J&K bank has been successful in controlling its level of Non-
performing assets as compared to the recent banking industry trends.

•The causes for NPA in Jammu & Kashmir Bank Limited were analyzed, the extent to which
profitability has been reduced, was also analyzed.
 RECOMMENDATIONS:
•It is recommended that the proper documentation and verification to be made before
sanctioning the loan.

•Empowering staff to make decisions related to sanctioning of loans.

•Constant interactions have to be maintained with the customers to keep track of their loan
payment.

•Strict measures have to be taken while issuing or sanctioning the loan. The measures can
include verification of job and salary slips, verification of securities and the like.

•The J&K bank ltd. is trying to reduce NPA through various techniques and it is suggested
that these measures have to be continued.
 BIBLIOGRAPHY
REFRENCE
Business Research Methods(2008) by O.R. Krishnaswami and B.G. Satyaprasad.
Banking and financial services in India(2009)by SOBIT SERU (Kalyani publications)
Financial Management(2007) by P.N. Reddy, H.R. Appannaiah and B.G.Satyaprasad.
Financial Management by Prassana Chandra(2008) (Tata Mc Graw Hill Publication

BIBLIOGRAPHY
http://www.rgare.com/corporateoverview/history/
http://www.jkbank.com/about/press-room/us-press-releases/2009/index.html?compID=588
http://www.npa .us/press/2001/p0101161.htm
http://www.moneycontrol.com/annual-report/karnatakabank/chairmans-speech/KB04
http://www.rbi.org
http://www.financialtimes.com