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Npa management in J & K Bank
1. Presented To:Mr. H.S Sidhu
Lec:- DBIMCS
Presented By:Ab. Raouf Naikoo
MBA-3rd Sem
Roll No :- 81
2.
The Jammu and Kashmir Bank was founded on October
1, 1938 under letters patent issued by the Maharaja of
Jammu And Kashmir, Hari Singh.
Jammu & Kashmir Bank is the only Bank in the country
with majority ownership vested with a state government –
the Government of Jammu & Kashmir. It is the sole
banker to the Government of Jammu & Kashmir.
The Bank commenced business on July 4, 1939 and was
considered the first of its nature and composition as a
State owned bank in the country.
3.
The bank had to face serious problems at the time of
independence when out of its total of ten branches
two branches of Muzaffarabad, Rawalakot and
Mirpur fell to the other side of the line of control
(now Pakistan-administered Kashmir) along with
cash and other assets.
Mushtaq Ahmed is the new Chairman & CEO of
Jammu & Kashmir Bank.
4.
All those Assets which do not generate periodical income are
called as NPA.
An amount due under any credit facility is treated as “past due
“when it is not been paid within 30 days from the due date.
Interest and/or installment of principal remain overdue for a
period of more than 180 days in respect of a term loan.
The bill remains overdue for a period of more than 180 days in
case of bill purchased or discounted.
If the customers do not repay principal amount and interest for
a certain period of time then such loans become NPA. Nonperforming assets are basically non-performing loans.
5.
Interest and/or installment of principal remain overdue for a
period of more 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).
Interest and/or principal remains overdue for two harvest
season but for a period not exceeding two half years in case of
an advance granted for agricultural purpose, and
Any amount to be received remains overdue for a period of
more than 90 days in respect of other accounts.
Interest and/or principal remains overdue for two harvest
season but for a period not exceeding two half years in case of
an advance granted for agricultural purpose, and
Any amount to be received remains overdue for a period of
more than 180 days in respect of other accounts.
6.
1.
2.
3.
4.
NPA can be further classified as:Standard Assets:- it generates continuous income and
repayment as and when they fall due.
Sub-standard assets:-it is one which has been classified as
NPA for a period not exceeding 12 months.
Doubtful Assets:- It is one which has remained NPA for a
period exceeding 12 months.
Loss Assets:- where loss has been identified by the bank,
internal or external auditor or central bank inspector but the
amount has not been written off, wholly or partly.
7.
Owners do not receive a market return on their capital in the worst
case, if the banks fails, owners lose their assets. In modern times
this may affect a broad pool of shareholders.
Depositors do not receive a market return on saving. In the worst
case if the bank fails, depositors lose their assets or uninsured
balance.
Banks redistribute losses to other borrowers by charging higher
interest rates, lower deposit rates and higher lending rates repress
saving and financial market, which hamper economic growth.
Nonperforming loans epitomize bad investment. They misallocate
credit from good projects, which do not receive funding, to failed
projects. Bad investment ends up in misallocation of capital, and by
extension, labour and natural resources.
8.
Nonperforming asset may spill over the banking
system and contract the money stock, which may lead
to economic contraction. This spillover effect can
channelize through liquidity or bank insolvency:
◦ When many borrowers fail to pay interest, banks
may experience liquidity shortage. This can jam
payment across the country.
◦ Illiquidity constraints bank in paying depositors.
9.
OBJECTIVES OF THE STUDY:To know the policies that the J&K Bank follows to cover its
NPA,s.
To know the relative efficiency of J&K Bank.
To know the NPA level of J&K Bank and other Indian Banks.
To know the ill effects of NPAs on the performance of the banks.
To get aware of the confidence among the customers of the J&K
Bank regarding the performance of the bank in recovery of NPAs.
To get aware of the services provided by J&k Bank and the level
of satisfaction among its customers.
To study the NPA coverage of J&k Bank in different financial
years and its effect on the overall efficiency of the bank at
different points of time.
10.
A research design is the framework or plan for a study that
guide the collection and analysis of data. In this research
report the descriptive research method is applied.
11.
Data collection is very important for conducting any research.
Success or failure of a research primarily depends on data
collection. Data may be collected by any of the following
methods:
Primary sources
Secondary sources
The primary sources of collecting data in this project include:
◦ Personal interviews
◦ Questionnaire
◦ Telephonic interviews
12.
The secondary sources through which data have been
collected for this project include the following:
Internet
Newspapers
Information brochures of the bank
Books and magazines
13.
The sampling plan in this project is as follows:
Population:
The customers of the bank.
Sampling unit: Any individual residing in district
Kulgam of J&K state.
Sample size:
100
Sampling procedure: convenience sampling
14.
Time allowed for the study was short. This limitation
narrowed the scope of the study.
Political instability in the region prevented to conduct the
research in the manner in which it could have been
conducted.
Negative responses from some of the respondents made it
difficult to interpret the data easily.
The survey is limited to district Kulgam only. So the
respondents were of this district only. This limitation may
have brought biasness in the study.
Some of the ambiguous replies which I omitted by taking
them as unnecessary could generate wrong results.
15.
Q.1) Are you satisfied with the ways J&K Bank grants loans?
Yes
Chart 1
NO
No. of respondents 100
Yes
80
No
20
20.00%
YES
NO
80.00%
16.
Q.2) Is the NPA level of JKB controllable?
YES
NO
CAN'T SAY
No. of respondents 100
YES 50
NO 25
CAN'T SAY 25
17.
Q.3) Are the profits of J&K Bank effected by NPA's?
YES
NO
CAN'T SAY
No. of respondents
YES 30
NO 15
CAN'T SAY 55
100
18.
Q.4) Are the NPA reduction techniques of JKB standardized?
YES
NO
CAN'T SAY
No. of respondents 100
Yes
45
No
20
Can’t say 35
19.
Q.5) Comparing with other Indian banks do you think that the
asset quality of J&K Bank has been appreciable always?
YES
Chart 7
75
NO
70
No. of respondents 100
YES
75
NO
25
65
60
55
50
45
40
35
30
25
20
15
10
5
0
75
25
YES
NO
20.
Q.6) Which bank is the role modal of banking in J&k?
SBI
Chart 8
PNB
5.00%
10.00%
JKB
5.00%
ICICI
Respondents 100
SBI
PNB
JKB
ICICI
80.00%
21. Q.7) Which bank provides best services in the state?
1 SBI
2 J&K BANK
3 OTHERS
No. of respondents 100
SBI
10
Others
5
J&K Bank 85
22.
The bank has brought a good improvement in NPA
recovery by increasing the NPA Coverage Ratio to
68.79% in 2009-10.
People of the state mostly prefer J&K Bank over other
banks.
The asset quality of J&K Bank is being appreciated by
the people as well as by the RBI.
Performance of the bank in recovery of NPAs has been
appreciated even though it needs further improvement.
The NPA reduction techniques of have J&K Bank have
been rated well by most of its customers.
23.
Most of the people rated the NPA level of J&K Bank as
controllable still lot of improvement is needed to lower down
the NPA level further and further.
The ways through which the bank offers loans to the general
public has been appreciated by most of the respondents. This
has increased the image of the bank in the eyes of the people.
The bank has a great business opportunity in the future as its
people friendly policies make the bank quite popular in the
state as well as the national market.
24.
Special training programmes should be conducted to make the
employees more skilled.
Before setting up any new branch the bank should make
efforts to make it online because online banking will make
supervision easy and increase the bank’s performance.
The bank should make efforts to be at top at national level
because this bank has a great customer strength and people
friendly policies.
The bank should adopt reward system for employees so that
the confidence among them may be increased and they will
put more efforts.
25.
One important suggestion is that the bank should not ignore
advertising at any point of time because present business is the
business of advertising and advertising has an important role
in the growth of business.
One more suggestion is that the bank should take initiatives to
increase the daily working hour’s time so that it can get
maximum amount of working days as Kashmir remains closed
most of the times due to strikes.
26.
In this report the purpose was to study the management of
NPAs in J&K Bank. The overall analyses leads to the
conclusion that J&K Bank’s performance regarding the
coverage of NPAs has been good but the performance has
not been consistent. Though the bank’s current
performance is better as compared to its past performance
still there is a need to improve asset quality and bring
consistency in the performance and eliminate NPAs
totally because the performance of the Bank has been
affected by the NPAs in the past.
27.
Research Methodology
Marketing Management
Bank Watch
Marketing Management
BOOKS
Navdeep Aggarwal
Philip kotler
Sajad Bazaz
T.N. Chabra
MAGAZINES AND NEWSPAPERS
Business world
Economic Times
Rising Kashmir
India today
Greater Kashmir
Times of India
