Impact Of NPA On Profitability of Public & Private Sector Banks

Management Research Project -II

Submitted
In the partial fulfillment of the Degree of Master of Business Administration
Semester-IV
By
Shikha Modi

12044311052

Priyanka Prajapati

12044311131

Dhara Shah

12044311146

Vishesh Shah

12044311147

Parth Upadhyay

12044311160

Under the Guidance of:

Prof. (Dr.) Mahendra Sharma
Prof. & Head,
V. M. Patel Institute of Management.
&
Jayesh D. Patel
Assistant Professor,
V. M. Patel Institute of Management.

Submitted To:
V. M. Patel Institute of Management

(April 2014)

Preface
As a partial fulfillment of the MBA Programme we need to make a Management Research
Project-II, So we have prepared this project report on Impact of NPA on profitability of public
sector and private sector bank.
This project work is basically meant to acquire knowledge about the Non Performing Asset.
This project report includes comparison of NPA of Public and Private sector bank, recovery
management, reasons_ tools and methods of Non Performing Assets.
To understand measures taken by different banks for recovery management under take Banks
executive survey.
Preparing this project report is a good learning experience for to us where in we came to know
about the various new aspects Non Performing Assets.
We feel great pleasure in submitting this Management Research Project II. We hope you will
accept and appreciate our efforts.

ACKNOWLEDGEMENT
Acknowledgement is the expression of gratitude or appreciation for something. So, we would
like to express our sincere gratitude to all those supportive in this project work. First of all, we
would like to thank Dr. Mahendra Sharma for giving us this opportunity to do this project and
learn from it.
We express our sincere thanks to Prof. Jayesh Patel, our project guide for helping us in giving us
all relevant information and constant guidance throughout the project.
We would like to express our sincere thanks Prof. Jayesh Patel for conducting sessions for
comprehensive project and helping us throughout the project. We would also express our thanks
for providing their valuable suggestions and knowledge regarding project work.
Finally we would like to thank all lecturers, friends and our families for their kind of support and
to all who directly or indirectly helped us in preparing this project report.

Date:
Place: Kherva

List of Table
4.1.1
4.1.2
4.1.3
4.2.1
4.2.2
4.2.3
4.2.4
4.3.1
4.3.2
4.3.3
4.3.4
8.1
8.2
8.3
8.4
8.5
8.6
8.7
8.8
8.9
8.10

ANOVA for Public and Private sector banks

Coefficient for Public and Private sector banks
Model summary for Public and Private sector banks
Descriptive statistics for public sector banks
ANOVA for Public sector banks
Coefficient for public sector banks
Model summary for Public sector banks
Descriptive statistics for Private sector banks
ANOVA for Private sector banks
Coefficient for Private sector banks
Model summary for Private sector banks
Public sector bank (2013)
Private sector bank(2013)
Public sector bank (2012)
Private sector bank(2012)
Public sector bank (2011)
Private sector bank(2011)
Public sector bank (2010)
Private sector bank(2010)
Public sector bank (2009)
Private sector bank(2009)

37
37
38
39
39
40
40
41
41
41
42
51
52
54
55
57
58
60
61
63
64

Chapter 1
Introduction

1.1 Introduction of banking sector in India

India cannot have a healthy economy without a sound and effective banking system. The
banking system should be hassle free and able to meet the new challenges posed by
technology and other factors, both internal and external.

In the past three decades, India's banking system has earned several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer confined
to metropolises or cities in India. In fact, Indian banking system has reached even to the
remote corners of the country. This is one of the main aspects of India's growth story.

The government's regulation policy for banks has paid rich dividends with the
nationalization of 14 major private banks in 1969. Banking today has become convenient
and instant, with the account holder not having to wait for hours at the bank counter for
getting a draft or for withdrawing money from his account.

1.2 Structure of banking sector in India

Commercial Banks can be classified in to :
1) Public Sector Bank
-State Banks & its associate banks
-Nationalized banks
2) Private Sector Banks
-Old Generation
-New Generation
-Local Area Banks
3) Foreign Banks
-Representative Office
4) Regional Rural Banks
5) Co-Operative Banks

The structure of the Indian banking system that developed during the pre-independence
period was without any purposive control and direction. There were no comprehensive
banking laws except the Bank Charter Act. 1876 which regulated the three presidency
bank and the Indian companies Act, 1913 provided some safeguards against bank
failures.

In India the British Government started a central Bank called the Reserve Bank of India
as a Private sector in 1935. After Independence, the new National Government
nationalized it by passing the Reserve Bank of India Act in 1949 has some provisions to
foster a sound and healthy banking system in India. To regulate the banking business the
3

Act vested enormous powers of supervision and control in the hands of the reserve bank
of India.

Reserve Bank is the banker to the banks-commercial, co-operative and Regional Rural
Banks. This relationship is established once the name of a bank is included in the second
schedule to the Reserve Bank of India Act, 1934. Such banks, called the scheduled banks,
are entitled to avail of the facilities of refinance from the Reserve Bank.

Since 1966 the state co-operative Banks have also been made eligible or inclusion in the
second schedule to the Act. The Regional Rural Banks, established since 1975, also enjoy
the status of scheduled banks. The public sector banks have been notified as scheduled
banks by the central government. The category of scheduled banks thus includes.
Commercial banks Indian and foreign
State co-operative Banks
Regional Rural Banks

A scheduled Bank means a bank included in the second schedule to the Reserve Bank of
India. Act, 1934. The Reserve Bank is empowered to include in the second schedule the
name of a bank which carries on the business of banking in India and which satisfies the
following conditions laid down in section 42(a).
It must have a paid-up capital and reserves of an aggregate value of not less than
Rs.5 lakhs;
It must satisfy the Reserve Bank that its affairs are not being conducted in a
manner detrimental to the interest of its depositors, and
It must be
(a)

a state co-operative bank, or

(b)

a company as defined in the companies Act, 1956, or

(c)

an institution notified by the central government in this behalf, or

(d)

a corporation or a company incorporation by or under any law in force in

any place outside India.
4

1.3 History of Banking in India

The first bank in India, though conservative, was established in 1786. From 1786 till today, the
journey of Indian Banking System can be segregated into three distinct phases:
Early phase of Indian banks, from 1786 to 1969
Nationalization of banks and the banking sector reforms, from 1969 to 1991
New phase of Indian banking system, with the reforms after 1991

Phase 1
The first bank in India, the General Bank of India, was set up in 1786. Bank of Hindustan
and Bengal Bank followed. The East India Company established Bank of Bengal (1809),
Bank of Bombay (1840), and Bank of Madras (1843) as independent units and called them
Presidency banks. These three banks were amalgamated in 1920 and the Imperial Bank of
India, a bank of private shareholders, mostly Europeans, was established. Allahabad Bank
was established, exclusively by Indians, in 1865.

Punjab National Bank was set up in 1894 with headquarters in Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. The Reserve Bank of India came in 1935.

During the first phase, the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1,100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with the Banking Companies Act, 1949, which was later changed to the Banking
Regulation Act, 1949 as per amending Act of 1965 (Act No. 23 of 1965).

The Reserve Bank of India (RBI) was vested with extensive powers for the supervision of
banking in India as the Central banking authority. During those days, the general public
had lesser confidence in banks. As an aftermath, deposit mobilization was slow. Moreover,
the savings bank facility provided by the Postal department was comparatively safer, and
funds were largely given to traders.
5

Phase 2
The government took major initiatives in banking sector reforms after Independence. In
1955, it nationalized the Imperial Bank of India and started offering extensive banking
facilities, especially in rural and semi-urban areas. The government constituted the State
Bank of India to act as the principal agent of the RBI and to handle banking transactions
of the Union government and state governments all over the country. Seven banks owned
by the Princely states were nationalized in 1959 and they became subsidiaries of the State
Bank of India. In 1969, 14 commercial banks in the country were nationalized. In the
second phase of banking sector reforms, seven more banks were nationalized in 1980.
With this, 80 percent of the banking sector in India came under the government
ownership.

Phase 3
This phase has introduced many more products and facilities in the banking sector as part
of the reforms process. In 1991, under the chairmanship of M Narasimham, a committee
was set up, which worked for the liberalization of banking practices. Now, the country is
flooded with foreign banks and their ATM stations. Efforts are being put to give a
satisfactory service to customers. Phone banking and net banking are introduced. The
entire system became more convenient and swift. Time is given importance in all money
transactions.

The financial system of India has shown a great deal of resilience. It is sheltered from
crises triggered by external macroeconomic shocks, which other East Asian countries
often suffered. This is all due to a flexible exchange rate regime, the high foreign
exchange reserve, the not-yet fully convertible capital account, and the limited foreign
exchange exposure of banks and their customers.

Reserve Bank of India (RBI)

The central bank of the country is the Reserve Bank of India (RBI). It was established in April
1935 with a share capital of Rs 5 crore on the basis of the recommendations of the Hilton Young
Commission. The share capital was divided into fully paid shares of Rs 100 each, which was
entirely owned by private shareholders in the beginning. The government held shares of nominal
value of Rs 220,000.

The RBI commenced operation on April 1, 1935, under the Reserve Bank of India Act, 1934.
The Act (II of 1934) provides the statutory basis of the functioning of the Bank. The Bank was
constituted to meet the following requirements:

Regulate the issue of currency notes

Maintain reserves with a view to securing monetary stability

Operate the credit and currency system of the country to its advantage

Indian Banks Association (IBA)

The Indian Banks Association (IBA) was formed on September 26, 1946, with 22 members.
Today, IBA has more than 156 members, such as public sector banks, private sector banks,
foreign banks having offices in India, urban co-operative banks, developmental financial
institutions, federations, merchant banks, mutual funds, housing finance corporations, etc.
The IBA has the following functions:

Promote sound and progressive banking principles and practices.

Render assistance and to provide common services to members.

Organize co-ordination and co-operation on procedural, legal, technical, administrative,

and professional matters.

Collect, classify, and circulate statistical and other information.

Pool expertise towards common purposes such as cost reduction, increased efficiency,
productivity, and improving systems, procedures, and banking practices.

Project good public image of banking through publicity and public relations.

Encourage sports and cultural activities among bank employees.

7

Banking Activities

Retail banking, dealing directly with individuals and small businesses.

Business banking, providing services to mid-market businesses.

Corporate banking, directed at large business entities.

Private banking, providing wealth management services to high net worth individuals.

Investment banking, activities in the financial markets, such as "underwrite" (guarantee

the sale of) stock and bond issues, trade for their own accounts, make markets, and advise
corporations on capital market activities like mergers and acquisitions.

Merchant banking is the private equity activity of investment banks.

Financial services, global financial institutions that engage in multiple activities such as
banking and insurance.

1.4 Introduction of NPA

A debt obligation where the borrower has not paid any previously agreed upon interest and
principal repayments to the designated lender for an extended period of time. The
nonperforming asset is therefore not yielding any income to the lender in the form of principal
and interest payments.

For example, a mortgage in default would be considered non-performing. After a

prolonged period of non-payment, the lender will force the borrower to liquidate any
assets that were pledged as part of the debt agreement. If no assets were pledged, the
lenders might write-off the asset as a bad debt and then sell it at a discount to a
collections agency.

An asset becomes non-performing when it ceases to generate income for the bank. A
non-performing asset (NPA) is defined generally as a credit facility in respect of which
interest and / or installment of principal has remained past due for two quarters or
more. An amount due under any credit facility is treated as past due when it has not
been paid within 30 days from the due date. It was, however, decided to dispense with
past due .

concept with effect from 31 March 2001. Accordingly, as from that date, a NPA shall be
an advance where
Interest and/or installment of principal remain overdue for more than 180 days in
respect of a term-loan.
The account remains out of order for more than 180 days, in respect of overdraft /
cash credit (OD / CC).
The bill remains overdue for more than 180 days in the case of bill purchased and
discounted.
Interest and / or installment of principal remains overdue for two harvest seasons,
but for a period not exceeding two half years in the case of an advance granted for
agricultural purpose.
Any amount to be received remains overdue for more than 180 days in respect of
other accounts.
9

1.5 Why assets become NPA?

A several factors is responsible forever increasing size of NPAs in PSBs. The Indian
banking industry has one of the highest percents of NPAs compared to international
levels. A few prominent reasons for assets becoming NPAs are as under :

Lack of proper monitoring and follow-up measures.

Lack of sincere corporate culture. Inadequate legal provisions on foreclosure and

bankruptcy.

Change in economic policies/environment.

Non transparent accounting policy and poor auditing practices.

Lack of coordination between banks/FIs .

Directed landing to certain sectors .

Failure on part of the promoters to bring in their portion of equity from their own
sources or public issue due to market turning unfavorable.

Criteria for classification of assets

Classification of agricultural and non-agricultural loans is required to be done into

10

1.6 Four categories, on the basis of age of overdue, as under

Standard Assets
Standard asset is one which does not disclose any problem and which does not carry more
than normal risk attached to business. Thus, in general, all the current loans, agricultural and
non-agricultural loans which have not become NPA may be treated as standard asset.
Sub-Standard Assets
A Non-performing asset may be classified as sub-standard on the basis of the following
criteria. (a) An asset which has remained overdue for a period not exceeding 3 years in
respect of both agricultural and non-agricultural loans should be treated as substandard. (b) In
case of all types of term loans, where installments are overdue for a period not exceeding 3
years, the entire outstanding in term loan should be treated as sub-standard. (c) An asset,
where the terms and conditions of the loans regarding payment of interest and repayment of
principal have been renegotiated or rescheduled, after commencement of production, should
be classified as sub-standard and should remain so in such category for at least one year of
satisfactory performance under the renegotiated or rescheduled terms. In other words, the
classification of an asset should not be upgraded merely as a result of rescheduling unless
there is satisfactory compliance of the above condition.
Doubtful Asset
A Non-Performing Asset may be classified as doubtful on the basis of following criteria: As
asset which has remained overdue for a period exceeding 3 years in respect of both
agricultural and non-agricultural loans should be treated as doubtful. In case of all types of
term loans, where installments are overdue for more than 3 years, the entire outstanding in
term loan should be treated as doubtful. As in the case of sub-standard assets, rescheduling
does not entitle a bank to upgrade the quality of advance automatically.
Loss Asset
Loss assets are those where loss is identified by the bank/ auditor/ RBI/ NABARD inspectors
but the amount has not been written off wholly or partly. In other words, an asset which is
considered unrealizable and/ or of such little value that its continuance as a doubtful asset is
11

not worthwhile, should be treated as a loss asset. Such loss assets will include overdue loans
in cases (a) where decrease or execution petitions have been time barred or documents are
lost or no other legal proof is available to claim the debt, (b) where the members and their
sureties are declared insolvent or have died leaving no tangible assets, (c) where the members
have left the area of operation of the society (refers to the borrower in whose name the
respective Loan Account with SCB/ CCB) leaving no property and their sureties have also no
means to pay the dues (d) where the loan is fictitious or when gross misutilisation is noticed,
and (e) amounts which cannot be recovered in case of liquidated societies.

12

1.7 Underlying reason for NPA in India

An internal study conducted by RBI shows that in the order of prominence ,the following
factor contribute to NPAs.

Internal Factor

Diversion of funds for

- Expansion/diversification /modernization
- Taking up new project
- Helping /promoting associate concerns time/cost overrun during the project
implementation stage

Business Failure

Inefficiency in management

Slackness in credit management and monitoring

Inappropriate Technology/technical problem

Lack of coordination among lenders

External Factor

Recession

Input/power storage

Price escalation

Exchange rate fluctuation

Accidents and natural calamities ,etc.

Changes in government policies in excise/ import duties, pollution control orders, etc.

13

Some other factors also affected to NPA which are mention below in detail:

Liberalization of economy/removal of restriction/reduction of tariffs

A large number of NPA borrowers were unable to compete in a competitive market in
which lower prices and greater choices were available to consumers. Further, borrowers
operating in specific industries have suffered due to political, fiscal and social compulsions,
compounding pressures from liberalization.

Lax monitoring of credit and failure to recognize Early Warnings Signals

It has been stated that approval of loan proposal is generally thorough and each proposal
passes through many levels before approval is granted. However, the monitoring of
sometimes complex credit files has not received the attention it needed which meant that
early warning signals were not recognized and standard assets slipped to NPA category
without banks being able to take proactive measures to prevent this. partly due to this
reason, adverse trends in borrowers performance were not noted and the position further
deteriorated before action was taken.

Over optimistic promoters

Promoters were often optimistic in setting up large projects and in some cases were not fully
above board in their intentions. screening procedures did not always highlight these issues.
often projects were set up with the expectation that part of the funding would be arranged
from the capital markets which were booming at the time of the project appraisal. When the
capital markets subsequently crashed, the requisite funds could never be raised, promoter
often lost interest and lenders were left stranded with incomplete/unviable projects.

Directed lending
Loans to some segment were dictated by Governments policies than commercial
imperatives.

14

Highly Leveraged borrowers

Some borrowers were under capitalized and over burdened with debt to absorb the changing
economic situation in the country. Operating within a protected marked resulted economic
situation in the country. Operating within a protected market resulted in low appreciation of
commercial/market risk.

Funding mismatch
There are said to be many cases where loans granted for short terms were used to fund long
term transactions.

High Cost of Funds

Interest rates as high as 20% were not uncommon. Coupled with high leveraging and falling
Denmark, borrowers could not continue to service high cost debt.

Willful Defaulters
There are a number of borrowers who have strategically defaulted on their debt service
obligation realizing that the legal resource available to creditors is slow in achieving results.

15

1.8 NPA Rules for bank

General Rules

In line with the international practices and as per the recommendations made by the
committee on Financial system (Chairman Shri M. Narasimham), the Reserve Bank of
India has introduced, in a phased manner, prudential norms for income recognition,
asset classification and provisioning for the advances portfolio of the banks so as to
move towards greater consistency and transparency in the published accounts.

The policy of income recognition should be objective and based on record of recovery
rather than on any subjective considerations. Likewise, the classification of assets of
banks has to be done on the basis of objective criteria which would ensure a uniform
and consistent application of norms. Also, the provisioning should be made on the basis
of classification of assets based on the period for which the asset has remained non
performing / overdue as also availability of security and its realizable value.

16

1.8.1 Norms for treating loans / advances as NPA

Treatment of agricultural advances

In respect of advances granted for agricultural purposes where interest payment is on
half-yearly basis synchronizing with harvest, banks should adopt the agricultural season as
the basis. In other words, if interest has not been paid during the last two seasons of
harvest (covering two half-years) after the principal has become overdue then such an
advance should be treated as NPA. This norm is applicable to all direct agricultural
advances listed in the Annexure. In respect of agricultural advances other than those
specified in the Annexure, identification of NPA would be done on the same basis as nonagricultural advances which at present is the 180 days delinquency norm. Crop loans for
each season, viz., Rabi and Kharif has to be treated as separate account and IRAC norms
have to be applied accordingly.

Treatment of advances for allied agricultural activities as well as non farm sector
Credit facilities granted for other allied agricultural activities as well as for non-farm
sector activities should be treated as NPA if amounts of installments of principal and / or
interest remain outstanding for a period of two quarters from the due date.

Project / Housing Loans, etc

In case of projects (industry, plantation, etc.) where moratorium is given for payment,
[loan becomes due only after moratorium or gestation period is over] such a loan becomes
overdue if installment is not paid on due date. Similarly, in the case of housing loans or
similar advances granted to staff members where interest is payable after recovery of
principal, such loans should be classified as NPA when there is a default in repayment of
principal on due date of payment and overdue criteria will be the basis for classification of
assets.

Consortium advances
In respect of consortium advances each bank is required to classify the borrowal accounts
according to its own recovery i.e., on the record of recovery of the individual member
17

banks. The banks participating in the consortium should therefore, arrange to get their
share of recovery transferred from the lead bank of the consortium.

Treatment of different facilities to borrower as overdue (NPA)

Short-term agricultural advances are granted by SCBs / CCBs to CCBs PACS respectively
for the purpose of on-lending. In respect of such advances as well as advances for other
purposes, if any, granted under on-lending system, only that particular facility which
became irregular should be treated as NPA and not all the other facilities granted to them.
Crop loans for each season, viz., Rabi and Kharif have to be treated as separate account
and accordingly IRAC norms have to be applied. In respect of all other direct loans and
advances granted to a borrower, all such loans will become NPA even if one loan A/c
becomes NPA.

Out of order status

In respect of cash credit / over draft facility an account should be treated as out of order,
if the outstanding balance remains continuously in excess of the sanctioned limit / drawing
power. In cases where the outstanding balance in the principal operating account is less
than the sanctioned limit / drawing power, but there are no credits continuously for six
months as on the date of Balance Sheet or credits are not enough to cover the interest
debited during the same period, these accounts should be treated as out of order.

Overdue
Any amount due to the bank under any credit facility is overdue, if it is not paid on
due date fixed by the bank.

Performance of the account as on the date of Balance Sheet

The performance of the account as on the date of Balance Sheet only has to be taken
into account for the purpose of NPA. Subsequent developments should not be
considered for determining NPAs. 2.10. If interest and / or installment of principle has
remained unpaid for any two quarters out of the four quarters ending 31 March of the
18

year concerned, the credit facility should be treated as NPA although the default may
not be continuously for two quarters during the year.

19

1.8.2 Provisioning Norms on the basis of Asset Classification

Need for provisioning
Provisioning is necessary considering the erosion in the value of security charged to
the banks over a period of time. Therefore, after the assets of CCBs / SCBs are
classified into various categories (viz., standard, sub-standard, doubtful and loss
assets) necessary provision has to be made for the same. The details of provisioning
requirements in respect of various categories of assets are mentioned below

Standard Asset

When the IRAC norms were introduced in the year 1996-97, no provisioning was
required in respect of standard assets. From the year ended 31 March 2000, banks are
required to make provision on Standard assets at a minimum of 0.25% of the total
outstanding in this category. The provision made on Standard assets may not be
reckoned as erosion in the value of assets and will form part of owned funds of the
bank. The advances granted against term deposits. National Savings Certificate
(NSC) eligible for surrender, Kisan Vikas Patra (KVP) Indira Vikas Patra (IVP), Life
policies, Staff loans would attract provision of 0.25% prescribed for Standard assets.
The provision towards standard assets need not be netted from gross advances and
should be shown separately as Contingent provision against Standard Assets under
Other liabilities and provisions others.

Sub-standard Asset

A general provision of 10% of total outstanding in this category may be made.

Doubtful Assets

100% is to be made to the extent to which the advance is not covered by realizable
value of securities to which the bank has a valid recourse and the realizable value is
estimated on a realistic basis.

20

Over and above item (a), provision is to be made depending upon the period for
which an asset has remained overdue, 20% to 50% of the secured portion on the
following basis :

Loss Asset

The entire loss asset should be written off. If the assets are permitted to be retained in
the books for any reasons, 100% of the outstanding thereof should be fully provided
for.

Provision for other assets/ outstanding liabilities

Loss in respect of cash balances/ deposits with other banks, amounts in branch
adjustment accounts, frauds and embezzlements, and depreciation on building, furniture
and vehicles, etc. may be assessed and fully provided for as per the existing practice.
With a view to ensuring full disclosure on the profitability and net worth of the bank,
Items not provided for or items of liabilities where inadequate provisions have been made
(e.g. Gratuity, Provident Fund, Income Tax, Interest accrued on deposits/ borrowings,
etc.), Inspecting Officers should specify the same to arrive at the unprovided for
expenditure and treat them as actual expenditure for the purpose of arriving at the net
worth.

21

1.8.3 Credit growth and NPA life cycle

NPAs are largely a fallout of banks activities with regard to advance, both at the management
and implementation levels .The credit appraisal system, monitoring of end -usage of funds
and recovery procedures.

High credit growth

Banks with proper credit appraisal recovery

process and management control

Low levels of NPA s

Banks with proper appraisal and loose

management control

High levels of NPAs

Inability to grow

Inherent strength to grow further

May stagnate unless restructured

It also depends on the overall economic environment, the business cycle and the legal
environment for recovery of defaulted loan since the overall environment is more or less
same for all banks, Non performing loans of individual banks are mainly a result of
management controls and systems put in place by them

A bank with an efficient credit appraisal and loan recovery system will grow stronger over
the years. Such banks have good management controls and also inherent strengths in terms
22

of a highly motivated staff, good checks and balance, which are further enhance by a
regulatory and supervisory system.

As the growth in advances is largely determine by the economic and business environment,
such banks will be able to push their credit portfolio aggressively, especially when
economy is booming. Also, as such banks have a diversified credit portfolio, it would act as
a cushion during economic downturns. This will results in lower NPAs, allowing them to
grow stronger and even adopt a more aggressive growth strategy and their by, withstand
marginally higher incidences of default.

However, a bank without inherent strength will not be able to push their credit portfolio
the way the want to. They are characterized by poor management control, inadequate credit
appraisal and even low levels of motivation among the staff. When such banks push their
advances portfolio, chances of their assets quality deteriorating are higher. since assets
quality will be visible only after credit disbursal, which it self depends on the regulatory
definition of NPAs, any deteriorating will be reflected after a time lag. Thus, bank without
inherent strength will have higher NPA levels, especially when the economy has seen
above average credit growth.

23

Reference
IBA Bulletin (March 2013)

RBI Bulletin (March 2013)

Genestenberg, financial management: by C.paramasivan T.subramanin, page no 150

.S. Mill, Fianancial management:theory and practice by Eugene F. Brigham, page no 206.

Geoffrey at al. (1969). Management of Money and Finance. Grower Press, New York.

24

Chapter 2
Review of Literature

25

Review of Literature:A large number of researchers have been studied to the issue of non performing asset (NPA) in
banking industry .A review of the relevant literature has been described as under: Non
Performing Assets engender negative impact on banking stability and growth. Issue of NPA and
its impact on erosion of profit and quality of asset was not seriously considered in Indian banking
prior to 1991. There are many reasons cited for the alarming level of NPA in Indian banking
sector. Asset quality was not prime concern in Indian banking sector till 1991, but was mainly
focused on performance objectives such as opening wide networks/branches, development of
rural areas, priority sector lending, higher employment generation, etc. The accounting treatment
also failed to project the problem of NPA, as interest on loan accounts were accounted on accrual
basis (Siraj K.K. and P. Sudarsanan Pillai, 2012).

A Committee on Banking Sector Reforms known as Narasimham Committee was set up by RBI
to study the problems faced by Indian banking sector and to suggest measures revitalize the
sector. The committee identified NPA as a major threat and recommended prudential measures
for income recognition, asset classification and provisioning requirements. These measures
embarked on transformation of the Indian banking sector into a viable, competitive and vibrant
sector. The committee recommended measures to improve operational flexibility and
functional autonomy so as to enhance efficiency, productivity and profitability (Chaudhary
& Singh, 2012).

The main cause of mounting NPAs in public sector banks is malfunctioning of the banks.
Narasimham Committee identified the NPAs as one of the possible effects of malfunctioning of
public sector banks (Ramu, N., 2009).It has been examined that the reason behind the falling
revenues from traditional sources is 78% of the total NPAs accounted in public sector banks
(Bhavani Prasad, G. and Veena, V.D., 2011).

An evaluation of the Indian experience in Financial Sector Reforms Published in the RBI
Bulletin gives stress to the view that the sustained improvement of the economic activity and
growth is greatly enhanced by the existence of a financial system developed in terms of both
26

operational and allocation efficiency in mobilizing savings and in channelizing them among
competing demands (G.Rangarajan, 1997).It has been observed that the current banking Scenario
and the need for the policy change, opines that a major concern addressed by the banking sector
reform is the improvement of the financial health of banks. The Introduction of prudential norms
is better financial discipline by ensuring that the banks are alert to the risk profile of their loan
portfolios (S.P.Talwar (1998).

The Reserve Bank of India has also conducted a study to ascertain the contributing factors for the
high level of NPAs in the banks covering 800 top NPA accounts in 33 banks (RBI Bulletin, July
1999). The study has found that the proportion of problem loans in case of Indian banking sector
always been very high. The problem loans of these banks, in fact, formed 17.91 percent of their
gross advances as on March 31, 1989. This proportion did not include the amounts locked up in
sick industrial units. Hence, the proportion of problem loans indeed was higher.

However, the NPAs of Indian Banks declined to 17.44 percent as on March 31, 1997 after
introduction of prudential norms. In case of many of the banks, the decline in ratio of NPAs was
mainly due to proportionately much higher rise in advances and a lower level of NPAs accretion
after 1992.

The study also revealed that the major factors contributing to loans becoming NPAs include
diversion of funds for expansion, diversification, modernization, undertaking new projects and
for helping associate concerns. This is coupled with recessionary trend and failure to tap funds in
the capital and debt markets, business failure (product, marketing, etc.),inefficient management,
strained labour relations, inappropriate technology/technical problems, product obsolescence,
recession input/power shortage, price escalation, accidents, natural calamities, Government
policies like changes in excise duties, pollution control orders, etc.

The RBI report concluded that reduction of NPAs in banking sector should be treated as a
national priority issue to make theIndian banking system stronger, resilient and geared to meet
the challenges of globalization (Parul Khanna, 2012)

27

Reference
"Kesavan's Lamentations". Crossword Bookstores. Retrieved July 2, 2013.
Terule &Solano, International Journal of Managerial Finance, Vol. 3, No. 2, pp. 164-177
http://www.academia.edu/4700608/A_Study_of_NonPerforming_Assets_on_Selected_Public_and_Private_Sector_Banks
http://www.abhinavjournal.com/images/Management_&_Technology/Dec13/10.pdf
http://www.slideshare.net/domariyaganj/nonperformingassetsofbanks

28

Chapter 3
Research Methodology

29

3.1 Introduction
The design of any research project requires considerable attention to the research methods and
the proposed data analysis. Within this section, we have attempted to provide some information
about how to produce a research design for a study. We offer a basic overview of the research
methods portion of a research proposal and then some data analysis templates for different types
of designs. Our goal is not to answer every question, but provide a head start.

3.2 Problem statement

The first and for most step happens to be that of selecting and properly defined the
research problem.

Research problems refers to some difficulty which a researcher experience in the context
of either a theoretical or practical situation and wants to obtain a solution for the same.

The research problem is one which requires a research of to find out the best solution for
the given problem that is to find out by which goals of action the objective can be attained
optimally in the context of a given environment.

As part of the research study we have selected Public sector and private sector bank of
India. The title of the problem is NPA Impact On Profitability Of Public Sector And
Private Sector Bank.

30

3.3 Objective Of The Study

Objectives are goals or aims ,which the management wishes the organization to achieve .There
are end points or pole star towards which all business activities like organizing, staffing, directing
and controlling are directed .Only after defined these and points can the manager determine the of
organization ,the kind of personnel and their qualification ,the kind of motivation, supervision and
direction and kind of control techniques, which he must employ to reach these points.

Primary Objective
Understand the concept of non performing assets of public sector and private sector banks.
Study the impact of non performing assets on profitability of public sector and private
sector banks.
Offer suggestions based on findings of the study in public sector and private sector bank.

Secondary Objective
To know is there any statistically significant relationship between independent variables
and choice of bank to transact with.

31

3.4 Scope Of the Study

The present study of the non performing assets is confined an restricted to the boundary of public
sector and private sector bank of India.

3.5 Research Model

IV

DV

Here,
IV= Independent variable
DV= Dependent variable
Regression analysis was carried out to test the impact of non performing assets on profitability of
bank. Here, Non performing assets is independent variable and profitability is the dependent
variable. So, study utilized one DV-one IV liner model.

32

3.6 Hypotheses Of The Study

H0: There is no significant relationship between Non performing assets and return on equity
H1: There is a significant relationship between Non performing assets and return on equity

33

3.7 Research Design

Research designs is a frame work or blue print for conducting research procedure is necessary for
obtaining information to solve the problem.

Research design

Exploratory

Descriptive

Causal

Research designed to assist the decision maker in determining, evaluating and selecting
the best course of action to take in a given situation.
Descriptive studies are usually the best methods for collecting information that will
demonstrate relationships and describe the world as it exists. These types of studies are
often done before an experiment to know what specific things to manipulate and include
in an experiment. Descriptive studies are designed primarily to describe what is going or
what exist.
In our study we have conducted the descriptive research to study what is the investors
opinion regarding the attrition rate of investment in the stock market.
34

3.8 Source of Data

Secondary data were used for the study. In this research we covered public and private sectors
bank which have the non performing assets. for the analysis of impact of non performing assets
on profitability and for this there must be needed of book value and return on equity. with the help
of book value we calculate the return on equity. this all the data collected from the capital line.

3.9 Tools Used for Analysis

In research study there is regression analysis used with the model of one DV and one IV. There is
One dependent variable and One Independent variable. Independent variable is NPA and
Dependent variable is Profitability in our research Study.

3.10 Sample Size

In this research study we have to taken public sector banks and privet sector banks for the study
we have selected 74 banks for the study.

35

Chapter 4
Data Analysis

36

4.1 Private and Public Sector Banks

H0: There is no significant relationship between Non- performing assets and return on equity of
bank.
H1: There is a significant relationship between Non- performing assets and return on equity of
bank.
Table 4.1.1 ANOVA Result For NPA
Model
Regression
Residual
Total
Note:*P < 0.05

Sum squares
1296.541
22030.075
23326.616

Df
1
388
389

Mean square
1296.541
56.779

F
22.835

Sig
0.000a

This model is fit because the significant level is less than 0.05. There is impact of Non
Performing Assets on Return on equity of banks.

Table 4.1.2 Coefficient For NPA

Model

1(constant)
NPA

un
standardize
coefficient
B
5.249
-0.276

Un standardize
Coefficient
Std. error
0.774
0.058

Sig.

6.781 0.000
-4.779 0.000

Note:*P < 0.05

In above table of coefficient there is significant is 0.000. So Null hypotheses is not
excepted so there is impact of Non Performing Assets on Return on equity of banks.

37

Table 4.1.3 Model Summary For NPA

Model

1
0.236a
Note:*P < 0.05

R
Adjusted Std.Error
Change Statistics
Square R
of the
R
F
Df Df2
Square
Estimate Square Change 1
Change
0.056 0.053
7.53515 0.056
22.835
1
388

Sig. F
change
0.000

This Model is fit because significant level is less than 0.000 so there is impact of Non
performing Assets on Return on equity of banks.

38

4.2 Public sector bank

H0: There is no significant relationship between Non- performing assets and return on equity of
Public sector bank.
H1: There is a significant relationship between Non- performing assets and return on equity of
Public sector bank

Table 4.2.1 Descriptive Statistics

Variable

Mean

Std.

Deviation
NPA

1.1514

0.73002

140

ROE

15.4703 5.29179

140

There is no any analysis from the descriptive statistics so further study is require.

Table no 4.2.2 ANOVA Result For NPA

Model

Sum squares

Df

Mean square

Sig

Regression

10.752

10.752

23.431

0.000

Residual

63.326

138

0.459

Total

74.078

139

Note:*P < 0.05

This model is fit because the significant level is less than 0.000. There is impact of Non
Performing Assets on Return on equity of public and private sector banks.

39

Table no 4.2.3 Coefficient For NPA

Model

un

Un standardize

standardize

Coefficient

Sig.

coefficient
B

Std. error

1(constant)

1.965

0.177

11.070 0.000

NPA

-0.053

0.011

-4.841

0.000

Note:*P < 0.05

In above table of coefficient there is significant is 0.000. So Null hypotheses is not
excepted so there is impact of Non Performing Assets on profitability of public and
private sector banks.

Table 4.2.4 Model Summary

Model R

Adjusted Std.Error

Change Statistics

Square

of the

Square

Estimate

Square

Change 1

Df

Df2

Sig. F
change

Change
1

0.381a

0.145

0.149

0.67741

0.145

23.431

138

0.000

Note:*P < 0.05

This Model is fit because significant level is less than 0.000 so there is impact of Non
performing Assets on profitability of public and private sector banks.

40

4.3 Private sector bank

H0: There is no significant relationship between Non- performing assets and return on equity of
private sector bank.
H1: There is a significant relationship between Non- performing assets and return on equity of
private sector bank.
Table 4.3.1 Descriptive statistics

Variable

Mean

NPA
ROE

2.5234
9.5527

Std.
Deviation
9.62836
6.34682

N
250
250

Table 4.3.2 ANOVA Result For NPA

Model
Sum squares
Regression
1417.475
Residual
21666.137
Total
23083.612
Note:*P < 0.05

Df
1
248
249

Mean square
1417.475
87.363

F
16.225

Sig
0.000

This model is fit because the significant level is less than 0.05. There is impact of
Non Performing Assets on Return on equity of banks.

Table 4.3.3 Coefficient For NPA

Model

1(constant)
NPA
Note:*P < 0.05

un standardize
coefficient
B
6.115
-376

Un standardize
Coefficient
Std. error
1.070
0.093

Sig.

5.716 0.000
-4.028 0.000

In above table of coefficient there is significant is 0.000. So Null hypotheses is

not excepted so there is impact of Non Performing Assets on profitability of
public and private sector banks.

41

Table 4.3.4 Model Summary For NPA

Model R

Adjusted Std.Error

Change Statistics

Square

of the

Square

Estimate

Square

Change

Df1

Df2

Sig. F
change

Change
1

248a

0.061

0.058

9.34684

0.061

16.225

248

0.000

Note:*P < 0.05

This Model is fit because significant level is less than 0.05 so there is impact of Non performing
Assets on profitability of public and private sector banks.

42

Chapter 5
Findings And Suggestions

43

5.1 Findings

Because of mismanagement in bank there is a positive relation between Total Advances,

Net Profits and NPA of bank which is not good.

Positive relation between NPA & profits are due to wrong choice of clients by Banks.

There is an adverse effect on the Liquidity of Bank.

Bank is unable to give loans to the new customers due to lack of funds which arises due
to NPA

5.2 Suggestion

Advances provided by banks need to be done pre-sanctioning evaluation and postdisbursement control so that NPA can decrease.

Good management needed on the side of banks to decrease the level of NPA.

Proper selection of borrowers & follow ups required to get timely payment.

44

Chapter 6
Conclusion

45

NPAs reflect the overall performance of the banks.

The NPAs have always been a big worry for the banks in india. The Indian banking
sector faced a serious problem of NPAs. .

A high level of NPAs suggests high probability of a large number of credit defaults that
affect the profitability and liquidity of banks.

The extent of NPAs has comparatively higher in public sectors banks. To improve the
efficiency and profitability, the NPAs have to be scheduled.

Various steps have been taken by government to reduce the NPAs. It is highly impossible
to have zero percentage NPAs. But at least Indian banks should take care to ensure that
they give loans to creditworthy customers.

46

Chapter 7
Bibliography

47

<http://www.abhinavjournal.com/images/Commerce_&_Management/Jul12/5.pdf > < 20/2/2014,

2:34

>

<http://ijarcsms.com/docs/paper/volume2/issue1/V2I1-0032.pdf > <20/2/2014, 2:57>

<http://www.capitaline.com/user/framepage.asp?id=1 > <4/03/2014, 3:27>
<http://www.academia.edu/4700608/A_Study_of_Non-

Performing_Assets_on_Selected_Public_and_Private_Sector_Banks > <15/4/2014, 4:00>

<http://www.abhinavjournal.com/images/Management_&_Technology/Dec13/10.pdf>

<20/4/2014, 10:38>
<http://www.academia.edu/4700608/A Study of Non-Performing Assets on Selected Public and
Private Sector Banks > <28/4/2014, 11:45>

Reference
Terule &Solano, International Journal of Managerial Finance, Vol. 3, No. 2, pp. 164-177
S. Mill, Fianancial management:theory and practice by Eugene F. Brigham, page no 206
Deloof, M., and Jegers, M. (1996), Trade credit, product quality, and intra group trade: Some
European evidence, Financial Management, Vol. 25, pp. 945-968. DOI:10.2307/3665806
Genestenberg, financial management :by C.paramasivan T.subramanin, page no 150

48

Chapter 8
Annexure

49

Table 8.1:Public sector bank

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maha
Canara Bank
Central Bank
Corporation Bank
Dena Bank
E X I M Bank
IOB
IDBI Bank
Indian Bank
NABARD
Oriental Bank
Pun. & Sind Bank
Punjab Natl.Bank
SBT
St Bk of Bikaner
St Bk of Hyderab
St Bk of India
St Bk of Mysore
St Bk of Patiala
Syndicate Bank
UCO Bank
Union Bank (I)
United Bank (I)
Vijaya Bank

NPA
EPS RS. book value
2013
2013
2013
ROE 2013
3.19
22.68
209.92
10.80411585
2.45
22.19
150.85
14.7099768
1.28
102.47
756.64
13.54276803
2.06
41.4
381.07
10.8641457
0.52
10.21
70.88
14.40462754
2.18
62.62
515.68
12.14318957
2.9
7.61
113.23
6.720833701
1.19
90.9
625.58
14.53051568
1.39
22.35
140.24
15.9369652
0
2.43
24.52
9.910277325
2.5
5.81
133.2
4.361861862
1.58
13.58
146.11
9.294367258
2.26
34.68
242.89
14.27806826
0.01
4.52
101.38
4.458473072
2.27
43.95
414.69
10.59827823
2.16
12.14
145.56
8.340203353
2.35
129.73
884.04
14.67467535
1.46
119.76
873
13.71821306
2.27
101.71
680.59
14.94438649
1.61 6,025.16
36779.13
16.38200795
2.1
200.71
1445.6
13.88420033
2.69
87.04
804.44
10.81994928
1.62
223.33
1812.36
12.32260699
0.76
32.16
158.91
20.23787049
3.17
7.56
97.19
7.778578043
1.61
34.61
262.9
13.16470141
2.87
7.98
119.08
6.701377225
1.3
8.98
82.66
10.86377934

50

Table 8.2: Privet sector bank

No
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64

Name
AB Bank
Abu Dhabi Comm.
Akola Janat. Com
Amer. Exp. Bank
Antwerp Diamond
Axis Bank
Bank of Bah &Kuw
Barclays Bank
BNP Paribas
Catholic Bank
Citibank N. A.
City Union Bank
Cosmos Cp Bank
Credit Agricole
DBS Bank
DCB Bank
Deutsche Bank
Dhanlaxmi Bank
Federal Bank
Greater Bombay
HDFC Bank
Hongkong & Shang
ICICI Bank
IndusInd Bank
ING Vysya Bank
J & K Bank
J P Morgan Chase
Kapol Co-op Bank
Karnataka Bank
Karur Vysya Bank
Kokan Merchanti
Kotak Mah. Bank
Lak. Vilas Bank
Mahanagar Co-op
Maratha Sahakari
Mogaveera Co-op

NPA% EPS
book value
2013
Rs.2013
2013
ROE 2013
8.98
2.16
20.3
10.64039409
0
0.84
15.09
5.566600398
0
26.76
425.96
6.282280026
1.87
0
7.38
0
0
0.89
14.36
6.197771588
0.36
107.59
707.51
15.2068522
3.16
0.86
14.23
6.043569923
1.74
0
9.24
0
0
1.75
20.59
8.499271491
1.12
7.54
150.56
5.007970244
1.47
7.26
45.28
16.0335689
0.63
6.62
34.58
19.14401388
4.67
30.82
500.38
6.159318918
0
1.58
17.98
8.787541713
2.37
1.98
20.07
9.865470852
0.75
4.08
37.83
10.7850912
0.13
2.52
19.29
13.06376361
3.36
0.31
85.81
0.361263256
0.98
47.47
371.77
12.76864728
2.55
9.15
97.51
9.383652959
0.2
27.33
152.2
17.95663601
0.33
4.3
32.1
13.39563863
0.77
69.63
578.18
12.0429624
0.31
19.78
141.66
13.96301002
0.03
38.69
292.1
13.24546388
0.14
209.1
1003.24
20.8424704
0
2.16
18.51
11.66936791
4.47
1.83
36.42
5.024711697
1.51
17.8
151.69
11.73445843
0.37
48.97
287.85
17.01233281
2.83
6.52
177.16
3.680289004
0.64
18.13
126.53
14.32861772
2.43
8.88
96.02
9.248073318
0.72
3.71
72.2
5.138504155
14.18
4.1
236.48
1.73376184
4.74
15.88
399.42
3.975764859
51

65
66
67
68
69
70
71
72
73
74
75
76
77
78

Mumbai Dist.Bank
Oversea-Ch. Bank
Pun. & Mah. Bank
Ratnakar Bank
Royal Bank
Sh.Arihant Co-op
Shamrao Vithal
South Ind.Bank
South Ind.Co-op
St Bk of Mauriti
Stand.Chart.Bank
Stand.Chart.PLC
T N Merc. Bank
Yes Bank

4.77
100
0.16
0.11
0.29
0
0.74
0.78
51.7
2.18
1.63
1.63
0.66
0.01

297.04
0
11.33
3.55
13.17
7.61
25.21
3.64
0
0.29
10.86
10.86
15,603.21
35.3

9218.44
9.78
107.22
63.48
167.55
122.5
195.33
21.41
20.44
11.37
66.56
66.56
72216.79
161.94

3.222237168
0
10.56705838
5.592312539
7.860340197
6.212244898
12.90636359
17.00140121
0
2.55057168
16.31610577
16.31610577
21.60606972
21.79819686

52

Table 8.3: Public sector bank

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maha
Canara Bank
Central Bank
Corporation Bank
Dena Bank
E X I M Bank
IOB
IDBI Bank
Indian Bank
NABARD
Oriental Bank
Pun. & Sind Bank
Punjab Natl.Bank
SBT
St Bk of Bikaner
St Bk of Hyderab
St Bk of India
St Bk of Mysore
St Bk of Patiala
Syndicate Bank
UCO Bank
Union Bank (I)
United Bank (I)
Vijaya Bank

Book value
NPA 2012 EPS 2012
2012
0.98
36.36
192.92
0.91
23.14
133.66
0.54
118.72
666.3
1.47
45.49
343.35
0.84
5.85
63.77
1.46
72.3
465.57
3.09
4.89
221.41
0.87
98.34
558.69
1.01
22.46
122.59
0
2.94
26.98
1.35
12.45
135.34
1.61
15.42
137.46
1.33
38.35
214.94
0.02
5.45
124.73
2.21
37.85
379.94
1.19
18.01
141.73
1.52
140.43
777.34
1.54
99.17
773.23
1.92
90.79
594.98
1.3
6,178.84
31314.07
1.82
170.05
1251.06
1.93
77.26
729.21
1.35
267.33
1622.04
0.96
21.2
133.5
1.96
15.84
94.72
1.7
30.94
235.91
1.72
14.69
114.65
1.72
8.65
76.17

ROE 2012
18.84719
17.31258
17.8178
13.24887
9.173593
15.52935
2.208572
17.60189
18.32123
10.89696
9.199054
11.21781
17.84219
4.369438
9.962099
12.70726
18.06545
12.82542
15.25934
19.73183
13.59247
10.59503
16.4811
15.88015
16.72297
13.11517
12.81291
11.35618

53

Table 8.4:Privet sector bank

No
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67

Name
AB Bank
Abu Dhabi Comm.
Akola Janat. Com
Amer. Exp. Bank
Antwerp Diamond
Axis Bank
Bank of Bah &Kuw
Barclays Bank
BNP Paribas
Catholic Bank
Citibank N. A.
City Union Bank
Cosmos Cp Bank
Credit Agricole
DBS Bank
DCB Bank
Deutsche Bank
Dhanlaxmi Bank
Federal Bank
Greater Bombay
HDFC Bank
Hongkong & Shang
ICICI Bank
IndusInd Bank
ING Vysya Bank
J & K Bank
J P Morgan Chase
Kapol Co-op Bank
Karnataka Bank
Karur Vysya Bank
Kokan Merchanti
Kotak Mah. Bank
Lak. Vilas Bank
Mahanagar Co-op
Maratha Sahakari
Mogaveera Co-op
Mumbai Dist.Bank
Oversea-Ch. Bank
Pun. & Mah. Bank

2012 EPS 2012 Book value 2012

0
2.21
18.14
0
0.75
14.25
0
22.33
419.56
1.19
0.06
7.99
1.96
0.86
13.47
0.27
100.03
552
2.49
1.02
13.37
1.45
0
9.34
0.07
0.76
18.84
1.1
8
167.68
0.9
5.13
41.75
0.44
6.7
30.45
4.79
39.03
625.52
0
2.77
17.76
0.6
2.3
18.09
0.57
2.29
33.39
0.09
2.27
17.62
0.66
0
85.54
0.53
43.95
333.29
0.84
10.73
91.77
0.18
21.32
127.52
0.62
4.42
31.7
0.73
54.17
523.98
0.27
16.8
96.46
0.18
29.67
258.11
0.15
160.22
844.13
0
1.6
16.35
1.25
5.18
34.86
2.11
12.5
137.99
0.33
44.54
252.68
4.24
2.66
168.71
0.61
14.55
107.28
1.74
10.41
90.14
0.05
3.6
75.36
13.55
4.2
208.86
3.82
23.84
694.66
0.98
290.48
10944.17
100
0
9.81
0.47
9.13
113.87

12.18302
5.263158
5.322242
0.750939
6.384558
18.12138
7.62902
0
4.03397
4.770992
12.28743
22.00328
6.239609
15.59685
12.71421
6.858341
12.88309
0
13.18671
11.69227
16.71895
13.94322
10.33818
17.41655
11.4951
18.98049
9.785933
14.85944
9.058627
17.62704
1.57667
13.56264
11.5487
4.77707
2.010916
3.431895
2.654199
0
8.017915
54

68
69
70
71
72
73
74
75
76
77
78

Ratnakar Bank
Royal Bank
Sh.Arihant Co-op
Shamrao Vithal
South Ind.Bank
South Ind.Co-op
St Bk of Mauriti
Stand.Chart.Bank
Stand.Chart.PLC
T N Merc. Bank
Yes Bank

0.2
3.01
0.74
28.39
0
6.18
0
22.81
0.28
3.45
4.33
3.44
0
0
0.7
25.68
0.7
25.68
0.45 10,951.07
0.05
27.03

53.13
174.07
129.84
176.2
17.84
80.33
12.48
193.52
193.52
58387.14
132.49

5.665349
16.30953
4.759704
12.94552
19.33857
4.282335
0
13.26995
13.26995
18.75596
20.40154

55

Table 8.5:Public sector bank

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maha
Canara Bank
Central Bank
Corporation Bank
Dena Bank
E X I M Bank
IOB
IDBI Bank
Indian Bank
NABARD
Oriental Bank
Pun. & Sind Bank
Punjab Natl.Bank
SBT
St Bk of Bikaner
St Bk of Hyderab
St Bk of India
St Bk of Mysore
St Bk of Patiala
Syndicate Bank
UCO Bank
Union Bank (I)
United Bank (I)
Vijaya Bank

NPA
2011
0.79
0.38
0.35
0.91
1.32
1.1
0.65
0.46
1.22
0.2
1.19
1.06
0.53
0.02
0.98
0.56
0.85
0.98
0.83
0.87
1.63
1.38
1.21
0.97
1.84
1.19
1.42
1.52

Book value
EPS 2011
2011
2011
28.21
160.5 17.576324
21.75
116.02 18.7467678
105.3
535.72 19.6557903
44.36
291.86 15.199068
5.81
61.02 9.52146837
89.07
405 21.9925926
27.13
231.2 11.7344291
92.16
481.86 19.1258872
17.98
103.76 17.3284503
2.92
27.08 10.7828656
16.52
131.96 12.5189451
16.2
128.69 12.5883907
37.62
184.44 20.396877
6.4
180.4 3.54767184
49.82
349.97 14.2355059
22.55
127.74 17.6530452
136.37
632.49 21.5608152
142.6
692.71 20.5858151
106.76
570.16 18.7245685
5,543.47
25615.23 21.6413048
126.27
1023.4 12.3382842
105.35
662.28 15.9071692
218.53
1389.4 15.728372
17.68
116.12 15.2256287
13.68
82 16.6829268
38.3
211.31 18.1250296
12.88
103.46 12.4492558
8.67
70.31 12.3311051

56

Table 8.6:Privet sector bank

No
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65

Name
AB Bank
Abu Dhabi Comm.
Akola Janat. Com
Amer. Exp. Bank
Antwerp Diamond
Axis Bank
Bank of Bah &Kuw
Barclays Bank
BNP Paribas
Catholic Bank
Citibank N. A.
City Union Bank
Cosmos Cp Bank
Credit Agricole
DBS Bank
DCB Bank
Deutsche Bank
Dhanlaxmi Bank
Federal Bank
Greater Bombay
HDFC Bank
Hongkong & Shang
ICICI Bank
IndusInd Bank
ING Vysya Bank
J & K Bank
J P Morgan Chase
Kapol Co-op Bank
Karnataka Bank
Karur Vysya Bank
Kokan Merchanti
Kotak Mah. Bank
Lak. Vilas Bank
Mahanagar Co-op
Maratha Sahakari
Mogaveera Co-op
Mumbai Dist.Bank

2011 EPS 2011

0
1.44
2.89
1.3
1.55
17.36
1.5
0.42
3.04
0
0.29
80.21
0.52
2.45
1.46
0.19
0
1.76
1.74
3.72
1.21
3.81
0.52
5.17
1.54
91.76
0
0.42
0.331
1.34
0.96
1.07
0.23
1.74
0.3
2.98
0.6
32.94
1.02
7.77
0.19
81.72
0.91
3.4
1.11
42.97
0.28
12.07
0.39
25.85
0.2
122.55
0
1.98
0
0.67
1.62
10.4
0.07
41.77
0
6.89
0.72
11.04
0.9
9.95
1.12
3.72
8.11
4.84
5.94
15.37
1.52
262.48

Book value
2011
ROE 2011
15.93
9.03954802
21.99
5.91177808
552.33
3.14304854
7.64
5.4973822
12.61
0
462.77
17.3325842
18.16
13.4911894
9.69
1.96078431
18.07
9.73990039
161.26
2.30683368
39
9.76923077
24.85
20.804829
1302.48
7.0450218
12.12
3.46534653
18.89
7.09370037
28.1
3.80782918
15.35
11.3355049
99.21
3.00372946
298.34
11.0410941
100.09
7.76301329
545.46
14.9818502
28.89
11.7687781
478.29
8.98408915
81.92
14.7338867
208.13
12.420122
717.4
17.0825202
16.03
12.3518403
40.3
1.66253102
129.07
8.05764314
223.78
18.6656538
167.54
4.11245076
92.23
11.9700748
83.23
11.954824
88.42
4.20719294
246.22
1.96572171
1304.25
1.17845505
1106.81
23.7150008
57

66
67
68
69
70
71
72
73
74
75
76
77
78

Oversea-Ch. Bank
Pun. & Mah. Bank
Ratnakar Bank
Royal Bank
Sh.Arihant Co-op
Shamrao Vithal
South Ind.Bank
South Ind.Co-op
St Bk of Mauriti
Stand.Chart.Bank
Stand.Chart.PLC
T N Merc. Bank
Yes Bank

0
0
0.36
1.65
1.13
0
0.29
0
0
0.27
0.27
0.27
0.03

0.11
10.58
0.54
10.73
6.08
18.22
2.51
5.6
0.61
30.47
30.47
8,796.07
20.5

10.23
139.9
50.42
145.68
142.56
159.09
14.99
81.3
17.08
175.23
175.23
48786.07
109.29

1.07526882
7.56254467
1.07100357
7.36545854
4.26487093
11.4526369
16.7444963
6.88806888
3.57142857
17.388575
17.388575
18.0298803
18.7574343

58

Table 8.7:Public sector bank

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maha
Canara Bank
Central Bank
Corporation Bank
Dena Bank
E X I M Bank
IOB
IDBI Bank
Indian Bank
NABARD
Oriental Bank
Pun. & Sind Bank
Punjab Natl.Bank
SBT
St Bk of Bikaner
St Bk of Hyderab
St Bk of India
St Bk of Mysore
St Bk of Patiala
Syndicate Bank
UCO Bank
Union Bank (I)
United Bank (I)
Vijaya Bank

Book
NPA
value
2010
EPS 2010 2010
0.66
26.07
131.73
0.17
20.73
90.93
0.34
81.18
413.27
1.31
33.88
243.41
1.64
9.87
55.84
1.06
71.99
305.83
0.69
24.27
107.96
0.31
78.78
402.6
1.21
17.49
83.43
0.2
3.02
24.54
2.52
12.38
116.54
1.02
13.79
113.48
0.23
34
152.66
0.02
7.79
181.25
0.87
43.74
292.19
0.36
26.98
105.4
0.53
126.17
514.78
0.91
134.13
568.12
0.78
88.58
483.48
0.55 3,883.28
20551.81
1.72
140.65
1038.77
1.02
122.16
575.94
1.04
183.78
1271.28
1.07
15.08
100.06
1.17
18.03
65.74
0.81
40.14
174.37
1.84
9.29
91.69
1.4
10.47
61.44

ROE 2010
19.79048053
22.79775652
19.64333245
13.91890226
17.67550143
23.53922114
22.48054835
19.56780924
20.96368213
12.30643847
10.62296207
12.15192104
22.27171492
4.297931034
14.96971149
25.59772296
24.5094992
23.60944871
18.32133697
18.89507542
13.54005218
21.21054276
14.45629602
15.07095743
27.42622452
23.02001491
10.13196641
17.04101563

59

Table 8.8 Private sector bank

No
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65

Name
AB Bank
Abu Dhabi Comm.
Akola Janat. Com
Amer. Exp. Bank
Antwerp Diamond
Axis Bank
Bank of Bah &Kuw
Barclays Bank
BNP Paribas
Catholic Bank
Citibank N. A.
City Union Bank
Cosmos Cp Bank
Credit Agricole
DBS Bank
DCB Bank
Deutsche Bank
Dhanlaxmi Bank
Federal Bank
Greater Bombay
HDFC Bank
Hongkong & Shang
ICICI Bank
IndusInd Bank
ING Vysya Bank
J & K Bank
J P Morgan Chase
Kapol Co-op Bank
Karnataka Bank
Karur Vysya Bank
Kokan Merchanti
Kotak Mah. Bank
Lak. Vilas Bank
Mahanagar Co-op
Maratha Sahakari
Mogaveera Co-op
Mumbai Dist.Bank

2010 EPS 2010

7.68
1.28
0.19
1.2
4.85
5.43
0
0
14.32
0
0.4
60.06
1.95
0.41
5.15
0
0
1.69
1.58
0.87
2.14
2.3
0.58
3.7
1.78
60.24
6.18
0.7
1
2.84
3.11
0
0.79
1.23
0.84
3.55
0.48
26.33
1.69
11.8
0.31
62.43
2.31
1.8
2.12
34.63
0.5
8.23
1.2
19.76
0.28
101.93
2.88
0.06
0
2.07
1.31
11.79
0.23
59.69
0
9.08
1.73
16.18
4.11
3.05
4.53
2.08
8.91
4.91
0
0.38
0
261.68

Book
value
2010
14.49
20.69
567.12
5.95
13.91
395.99
17.16
9.5
16.32
184.72
35.19
20.66
1383.69
12.7
17.55
27.02
13.62
68.63
273.9
135.53
470.13
25.5
462.99
52.68
185.04
620.84
15
50.92
136.78
257.57
168.08
128.83
75.79
101.87
336.72
1264.72
11132.2

ROE 2010
8.833678399
5.799903335
0.957469319
0
0
15.16704967
2.389277389
0
10.35539216
0.47098311
6.535947712
17.9090029
4.353576307
5.511811024
16.18233618
0
9.030837004
5.172665015
9.612997444
8.706559433
13.27930572
7.058823529
7.479643189
15.62262718
10.67877216
16.41807873
0.4
4.065200314
8.61968124
23.17428272
5.402189434
12.55918652
4.024277609
2.041818003
1.458184842
0.030046176
2.35065845
60

66
67
68
69
70
71
72
73
74
75
76
77
78

Oversea-Ch. Bank
Pun. & Mah. Bank
Ratnakar Bank
Royal Bank
Sh.Arihant Co-op
Shamrao Vithal
South Ind.Bank
South Ind.Co-op
St Bk of Mauriti
Stand.Chart.Bank
Stand.Chart.PLC
T N Merc. Bank
Yes Bank

0
0
0.97
1.95
0.24
0
2.39
0
4.32
1.4
1.4
0.24
0.06

0
17.59
1.73
0
11.06
14.91
20.02
5.7
0.95
34.47
34.47
6,463.57
23.81

10.12
148.85
33.59
134.95
154.09
161.85
129.78
79.21
16.46
153.5
153.5
41006.07
90.96

0
11.8172657
5.150342364
0
7.177623467
9.21223355
15.42610572
7.196061103
5.771567436
22.45602606
22.45602606
15.76247126
26.17634125

61

Table 8.9 :Public sector bank

No
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Name
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maha
Canara Bank
Central Bank
Corporation Bank
Dena Bank
E X I M Bank
IOB
IDBI Bank
Indian Bank
NABARD
Oriental Bank
Pun. & Sind Bank
Punjab Natl.Bank
SBT
St Bk of Bikaner
St Bk of Hyderab
St Bk of India
St Bk of Mysore
St Bk of Patiala
Syndicate Bank
UCO Bank
Union Bank (I)
United Bank (I)
Vijaya Bank

NPA
EPS
2009
2009
0.72
16.78
0.18
12.7
0.31
59.44
0.44
57.16
0.79
8.46
1.09
49.19
1.24
11.83
0.29
60.12
1.09
14.53
0.23
3.41
1.33
23.57
0.92
11.42
0.18
27.11
0.03
6.95
0.65
34.3
0.32
23.56
0.17
94.63
0.58
119.36
0.85
78.65
0.38 3,488.35
1.79
139.76
0.5
91.89
0.6
187.83
0.77
17.08
1.18
9.97
0.34
33.33
1.48
1.21
0.82
5.88

Book
value
2009
111.45
75.2
352.36
224.08
47.97
244.87
86.26
341.36
67.95
28.46
109.06
102.69
127.52
172.37
257.54
77.41
416.74
449.98
409.29
18599.01
912.73
464.2
1140.56
88.03
50.88
139.66
15.39
53.47

ROE 2009
15.056079
16.8882979
16.8691111
25.5087469
17.6360225
20.0882101
13.714352
17.6119053
21.3833701
11.9817287
21.6119567
11.1208492
21.2594103
4.03202413
13.3183195
30.4353443
22.7072035
26.5256234
19.2162037
18.7555682
15.3123048
19.7953468
16.4682261
19.4024764
19.5951258
23.865101
7.86224821
10.9968206

62

Table 8.10:Privet sector bank

No
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63

Name
AB Bank
Abu Dhabi Comm.
Akola Janat. Com
Amer. Exp. Bank
Antwerp Diamond
Axis Bank
Bank of Bah &Kuw
Barclays Bank
BNP Paribas
Catholic Bank
Citibank N. A.
City Union Bank
Cosmos Cp Bank
Credit Agricole
DBS Bank
DCB Bank
Deutsche Bank
Dhanlaxmi Bank
Federal Bank
Greater Bombay
HDFC Bank
Hongkong & Shang
ICICI Bank
IndusInd Bank
ING Vysya Bank
J & K Bank
J P Morgan Chase
Kapol Co-op Bank
Karnataka Bank
Karur Vysya Bank
Kokan Merchanti
Kotak Mah. Bank
Lak. Vilas Bank
Mahanagar Co-op
Maratha Sahakari

Book
EPS
value
2009 2009
2009
ROE 2009
6.67
1.03
13.22 7.79122542
0
2.59
19.49 13.2888661
0
45.64
577.48 7.90330401
0.77
3.5
30.02 11.6588941
0
0.58
11.01 5.26793824
0.4
48.85
284.53 17.1686641
1.51
3.29
12.32 26.7045455
4.59
0.06
10.62 0.56497175
0.86
1.59
14.03 11.3328582
2.39
19.7
184.05 10.7036131
2.63
8.35
42.95 19.4412107
1.08
3.69
20.65 17.8692494
2.08
104.11 1270.23 8.19615345
0
2.22
13 17.0769231
0.55
2.72
14.71 18.4908226
3.88
0
30.89
0
0.88
1.18
13.11 9.00076278
0.88
8.79
66.2 13.2779456
0.2
28.41
252.57 11.2483668
2.01
13.51
164.43 8.21626224
0.63
51.08
344.31 14.835468
1.42
2.87
23.7 12.1097046
2.09
32.4
444.92 7.28220804
1.14
3.96
40.23 9.84340045
1.2
18.06
154.94 11.656125
1.38
81.65
540.99 15.0927004
1.27
2.9
16.41 17.6721511
0
2.7
58.98 4.57782299
0.98
20.92
128.89 16.2308946
0.25
41.68
250.26 16.6546791
0.78
6.81
160.16
4.251998
2.39
7.93
110.33 7.18752832
1.24
9.89
93.01 10.6332652
4.38
4.79
111.45 4.29789143
13.03
4.49
312.64 1.4361566
63

64
65
66
67
68
69
70
71
72
73
74
75
76
77
78

Mogaveera Co-op
Mumbai Dist.Bank
Oversea-Ch. Bank
Pun. & Mah. Bank
Ratnakar Bank
Royal Bank
Sh.Arihant Co-op
Shamrao Vithal
South Ind.Bank
South Ind.Co-op
St Bk of Mauriti
Stand.Chart.Bank
Stand.Chart.PLC
T N Merc. Bank
Yes Bank

13.25
6.85
0
1.33
0.68
2.2
1.9
2.21
1.13
0
0
1.37
1.37
0.34
0.36

0 1276.81
0
73.26 11741.39 0.62394657
0.63
10.16 6.2007874
21.08
160.04 13.1717071
2.74
32.59 8.40748696
1.15
141.15 0.8147361
8.46
161 5.25465839
11.51
172.3 6.68020894
16.72
113.76 14.697609
4.92
74.77 6.58017922
0.66
15.15 4.35643564
28.22
133.82 21.0880287
28.22
133.82 21.0880287
5,261.07 35304.29
14.90207
10.23
54.69 18.7054306

64