CONTENTS

CHAPTER CHAPTER NAME PAGE NO.

INTRODUCTION
 Introduction
 Need of the study
I  Objectives of the study 1-8
 Scope of the study
 Research methodology
 Limitations of the study

INDUSTRY PROFILE &

II 9-16
COMPANY PROFILE

DATA ANALYSIS AND

III 17-38
INTERPRETATION

FINDINGS,
IV CONCLUSIONS & 39-41
SUGGESTIONS

BIBLIOGRAPHY 42
 CHAPTER-I
INTRODUCTION
 INTRODUCTION

LOANS

In finance, a loan is a debt evidenced by a note which specifies, among other things,
the principal amount, interest rate, and date of repayment. A loan entails the
reallocation of the subject asset(s) for a period of time, between the lender and
the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called

the principal, from the lender, and is obligated to pay back or repay an equal amount
of money to the lender at a later time. Typically, the money is paid back in
regular installments, or partial repayments; in an annuity, each installment is the same
amount.

The loan is generally provided at a cost, referred to as interest on the debt, which
provides an incentive for the lender to engage in the loan. In a legal loan, each of
these obligations and restrictions is enforced by contract, which can also place the
borrower under additional restrictions known as loan covenants. Although this article
focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For
other institutions, issuing of debt contracts such as bonds is a typical source of
funding.

TYPES OF LOANS

Secured

A secured loan is a loan in which the borrower pledges some asset (e.g. a car or
property) as collateral.

A mortgage loan is a very common type of debt instrument, used by many individuals
to purchase housing. In this arrangement, the money is used to purchase the property.
The financial institution, however, is given security — a lien on the title to the house
— until the mortgage is paid off in full. If the borrower defaults on the loan, the bank

1
would have the legal right to repossess the house and sell it, to recover sums owing to
it.

In some instances, a loan taken out to purchase a new or used car may be secured by
the car, in much the same way as a mortgage is secured by housing. The duration of
the loan period is considerably shorter — often corresponding to the useful life of the
car. There are two types of auto loans, direct and indirect. A direct auto loan is where
a bank gives the loan directly to a consumer. An indirect auto loan is where a car
dealership acts as an intermediary between the bank or financial institution and the
consumer.

Unsecured

Unsecured loans are monetary loans that are not secured against the borrower's assets.
These may be available from financial institutions under many different guises or
marketing packages:

 credit card debt

 personal loans
 bank overdrafts
 credit facilities or lines of credit
 corporate bonds (may be secured or unsecured)

The interest rates applicable to these different forms may vary depending on the
lender and the borrower. These may or may not be regulated by law. In the United
Kingdom, when applied to individuals, these may come under the Consumer Credit
Act 1974.

Recovery of loans

When a loan has been taken by a person from a bank then he has to repay it according
to the EMI fixed by the bank but if the person has failed to pay the EMI regularly for
a fixed period then the account is named as NPA and after that bank start recovery
procedure means to take back his loan amount from the mortgaged property of the
person according to the procedure of SECURITISATION ACT.

2
Management of Recovery of loans is the process of planning, testing, and
implementing the recovery procedures ad standards required to restore service in the
event of a component failure; either by returning the component to normal operation,
or taking alternative actions to restore service.

Recovery Management is the acknowledgement that failures will occur regardless of

how well the system is designed. The intent is to anticipate and minimize the impact
of these failures through the implementation of predefined, pretested, documented
recovery plans and procedures.

The primary objective of recovery of loans is to ensure that service level requirements
are achieved. This is accomplished by having recovery procedures in place that will
restore service to a failing component as quickly as possible.

In simple words recovery means to get back our own thing back which we have given
it to others. In banks, recovery means to get back the amount back which they have
given to the customers in the form of loans and advances. The main business of bank
is through loans and advances. They accept deposits from the public and lend it to the
needed customers in the form of loans and advances and they charge interest plus a
certain portion of premium from them and then they provide a certain portion of
amount of interest to the customers who had deposited in the bank and the difference
of interest is their profit.

3
NEED OF THE STUDY

Since the banks are playing a vital role in modern days, it is important to
understand the Recovery performance of loans in the Banks. In general sense the term
"Recovery" is referred as repayment or reimbursement of loans issued to the
customers for their respective needs according to the predetermined terms and
conditions. Recovery plays a vital role in functioning of the bank as it acts as a source
for earning interest through the loans already issued which are then recovered to
continue the cycle of mobilization of loans.

4
OBJECTIVES OF THE STUDY

1. To know the various types of loans and advances provided by the bank.
2. To study the importance of advances in the area.
3. To study the faults in lending loans and advances.
4. To know the effectiveness of recovery of loans and advances.
5. To know the NPA condition of the bank.
6. To know the techniques used by the bank to recover the loans.
7. To know about the percentage of recovery of loans.
8. To know about the functioning of in the field of Loans and Advances.
9. To study about the lending policy followed by the bank.

5
SCOPE OF THE STUDY

The study relates to analysis of the effective recovery of loans and advances
with reference to Axis bank. Axis bank is one of the private sector banks in India,
which provides loans and advances when it is required by individual or companies
and accepts the deposits from the public.

6
RESEARCH METHODOLOGY

Sources of data collection

The data is most vital and the integral aspect, which is responsible for the completion
of any project. The data can be gained and derived from two methods, that is

 Primary data collection

 Secondary data collection

Primary data collection

Personal observation in to the banking system

Discussion and clarification with the guide and other managers

 Taking personal guidance from the employees working in that organization.

Secondary data collection

Through internet, magazines, journals, annual reports, income and expenditure

statement.

7
LIMITATIONS OF THE STUDY

 The time is the main constraint of this project. The project report would be
more specific and more informative if more time would be allotted.

 The data derived may not be accurate up to mark. Lot of errors may prevail in
the data collection process. Especially the data collected by the primary
sources may contain errors.

 Detailed analysis was not possible because of non availability of the sufficient
data.

 The study is confined to the extent of information provided by the banker and
it is assumed to be factual and validity is not questioned.

8
 CHAPTER-II
INDUSTRY PROFILE &
COMPANY PROFILE
 INTRODUCTION TO BANKING IN INDIA

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not only be hassle free but, it
should be able to meet new challenges posed by the technology and any other
external and internal factors.

Banking in India has its origin as early as Vedic Period. It is believed that the
transition from money lending to banking must have occurred even before Manu, the
great Hindu Jurist who has devoted a section of his work to deposits and advances
and laid down the rules relating to rates of interest. During the days of East India
Company it was the turn of the agency houses to carry on the banking business.

Banking in India originated in the first decade of 18th century. The first
banks were The General Bank of India, which started in 1786, and Bank of
Hindustan, both of which are now defunct. The oldest bank in existence in India is the
State Bank of India, which originated in the "The Bank of Bengal" in Calcutta in June
1806. This was one of the three presidency banks, the other two being the Bank of
Bombay and the Bank of Madras. The presidency banks were established under
charters from the British East India Company. They merged in 1925 to form the
Imperial Bank of India, which, upon India's independence, became the State Bank of
India. For many years the Presidency banks acted as quasi-central banks, as did their
successors.

The Reserve Bank of India formally took on the responsibility of regulating

the Indian banking sector from 1935. After India's independence in 1947, the Reserve
Bank was nationalized and given broader powers. A couple of decades later, foreign
banks such as Credit Lyonnais started their Calcutta operations in the 1850s. At that
point of time, Calcutta was the most active trading port, mainly due to the trade of the
British Empire, and due to which banking activity took roots there and prospered.

9
Current situation

Currently (2007), banking in India is generally fairly mature in terms of

supply, product range and reach-even though reach in rural India still remains a
challenge for the private sector and foreign banks. In terms of quality of assets and
capital adequacy, Indian banks are considered to have clean, strong and transparent
balance sheets relative to other banks in comparable economies in its region. The
Reserve Bank of India is an autonomous body, with minimal pressure from the
government.

The stated policy of the Bank on the Indian Rupee is to manage volatility but without
any fixed exchange rate-and this has mostly been true.

With the growth in the Indian economy expected to be strong for quite some
time-especially in its services sector-the demand for banking services, especially
retail banking, mortgages and investment services are expected to be strong. One may
also expect M&As, takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pincus to

increase its stake in Kotak Mahindra Bank (a private sector bank) to 10%. This is the
first time an investor has been allowed to hold more than 5% in a private sector bank
since the RBI announced norms in 2005 that any stake exceeding 5% in the private
sector banks would need to be vetted by them.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector

banks (that is with the Government of India holding a stake)after merger of New
Bank of India in Punjab National Bank in 1993, 29 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 31
foreign banks. They have a combined network of over 53,000 branches and 17,000
ATMs. According to a report by ICRA Limited, a rating agency, the public sector
banks hold over 75 percent of total assets of the banking industry, with the private
and foreign banks holding 18.2% and 6.5% respectively.

10
 PROFILE OF AXIS BANK - CORPORATE

Axis Bank is the third largest private sector bank in India. Axis Bank offers
the entire spectrum of financial services to customer segments covering Large and
Mid-Corporates, SME, Agriculture and Retail Businesses.

The Bank has a large footprint of 1787 domestic branches (including

extension counters) and 10,363 ATMs spread across 1,139 centres in the country as
on 31st December 2012. The Bank also has 7 overseas branches / offices in
Singapore, Hong Kong, Shanghai, Colombo, Dubai, DIFC - Dubai and Abu Dhabi.

Axis Bank is one of the first new generation private sector banks to have
begun operations in 1994. The Bank was promoted in 1993, jointly by Specified
Undertaking of Unit Trust of India (SUUTI) (then known as Unit Trust of India),Life
Insurance Corporation of India (LIC), General Insurance Corporation of India (GIC),
National Insurance Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance Company Ltd. The
shareholding of Unit Trust of India was subsequently transferred to SUUTI, an entity
established in 2003.

With a balance sheet size of Rs.2,85,628 crores as on 31st March 2012, Axis
Bank is ranked 9th amongst all Indian scheduled banks. Axis Bank has achieved
consistent growth and stable asset quality with a 5 year CAGR (2007-12) of 31% in
Total Assets, 30% in Total Deposits, 36% in Total Advances and 45% in Net Profit.

Registered Office

The registered office of Axis Bank is located at

‘Trishul’, 3rd Floor,
Opposite Samartheshwar Temple,
Near Law Garden, Ellisbridge,
Ahemdabad, Gujarat - 380 006.

11
Corporate Office

Axis House,
C-2 Wadia International Centre,
Pandurang Budhkar Marg, Worli, Mumbai – 4000 025

The Corporate Office of Axis Bank is located at Axis House Mumbai. Axis
House has received the ‘Platinum’ rating awarded by the US Green Building Council
for its environment friendly facilities and reduction of carbon emission.

Subsidiaries

The Bank has set up six wholly-owned subsidiaries

Axis Securities and Sales Ltd. (Since renamed Axis Capital Ltd.)
Axis Private Equity Ltd.
Axis Trustee Services Ltd.
Axis Asset Management Company Ltd.
Axis Mutual Fund Trustee Ltd.
Axis U.K. Ltd.

Promoters

Axis Bank Ltd. has been promoted by the largest Financial Institutions of the
country, UTI, LIC, GIC and its subsidiaries. The Bank was set up in 1993 with a
capital of Rs. 115 crore, with UTI contributing Rs. 100 crore, LIC - Rs. 7.5 crore and
GIC and its four subsidiaries contributing Rs. 1.5 crore each.

Capital Structure

The Bank has authorized share capital of Rs. 500 crores comprising 500,000,000
equity shares of Rs.10/- each. As on 31st March, 2012 the Bank has issued,
subscribed and paid-up equity capital of Rs. 413.20 crores, constituting 413,203,952
shares of Rs. 10/- each. The Bank’s shares are listed on the National Stock Exchange
and the Bombay Stock Exchange. The GDRs issued by the Bank are listed on the
London Stock Exchange (LSE).

12
Vision & Values

Vision 2021

To be the preferred financial solutions provider excelling in customer delivery

through insight, empowered employees and smart use of technology

Core Values

 Customer Centricity

 Ethics

 Transparency

 Teamwork

 Ownership

An overview of various business segments

RETAIL BANKING

Axis Bank has developed a strong retail banking franchise over the years. Retail
Banking is one of the key drivers of the Bank’s growth strategy and it encompasses a
wide range of products delivered to customers through multiple channels. The Bank
offers a complete suite of products across deposits, loans, investment solutions,
payments and cards to help customers achieve their financial objectives. The Bank
focuses on product differentiation as well as a high level of customer-service to
enable it to build its retail business.

The Bank has continued to develop its risk management capabilities in Retail
business, both from a credit and operations risk standpoint. The branch channel is
effectively utilised for growing the retail assets business, with loan and card products
being offered to existing clientele.

The growth areas identified by the Bank are in the areas of residential
mortgages and passenger car loans. Of the total retail loans portfolio, 88.47% is in the
form of secured loans (residential mortgages and auto loans).

13
 The Bank offers a wide range of payment solutions to its customers in the
form of debit cards, prepaid cards and credit cards. As on 31st March 2012, the Bank
has a base of approximately 124.99 lac debit cards, placing it among the leading
players in the country. The Bank is also a dominant player in prepaid cards.Axis
Bank has over 2 lakh installed EDC machines - a highest for any bank in India.

Axis Bank Privée’, an exclusive private banking service offers advisory,

investment and lending solutions to its customers across 10 cities in the country.
Privée follows a client-focused investment process and a team-based approach for
managing client relationships. The relationship management team is supported by a
team of product specialists, client servicing teams, investment consultants and
research experts. The private banking business focuses on addressing both the
personal and corporate advisory needs of an entrepreneur or business family by
bringing solutions offered by various business groups across the retail and corporate
businesses within the Bank under an integrated platform.

The Bank launched ‘Axis Bank Wealth’ in 2008-09 targeting customers who
have a total relationship value with the Bank of between Rs.30 lacs and Rs.200 lacs.
The value proposition aims at delivering a ‘One Bank’ experience to such customers
and is positioned as a complete solution involving banking, investment and asset
needs.

The Bank also distributes third party products such as mutual funds,
Bancassurance products (life and general insurance), online trading, Goldand Silver
coins through its branches.

The retail business of the Bank is supported by innovative services and

alternate channels which provide convenience of transactions to customers. These
channels include an extensive ATM network, internet banking, mobile banking and
phone banking.

International Retail

International Retail Business focuses specifically on the overseas sales channel,

retail foreign exchange business, remittances and retail businesses in overseas centres
such as Hong Kong and Sri Lanka, where the Bank has a presence. The products

14
offered in the area of retail Forex and remittances include travel currency cards,
inward and outward wire transfers, traveller’s cheques and foreign currency notes,
remittance facilities through online portals as well as through collaboration with
correspondent banks, exchange houses and money transfer operators. The Bank
continued to have a market leadership position in Travel Currency Cards with 11
currency options other than INR being offered. The aggregate spends on Travel
Currency Cards have crossed USD 3 billion during the year 2012-13.

Business Banking

Business Banking leverages the Bank’s strengths – a well distributed network

of branches and a strong technology platform to offer the best in transaction banking
services. The Bank offers a range of current account products and cash management
solutions across all business segments covering corporates, institutions, central and
state government ministries and undertakings as well as small and retail customers.

The Bank is one of the top CMS providers in the country. The Bank acts as an
agency bank for transacting government business offering services to various Central
Government Ministries / Departments and other State Governments and Union
Territories.

In order to provide solutions for business to effectively manage their funds

flow, the Bank has introduced liquidity management solution for corporate
customers. Similarly, a single window for all payment requirements was launched
with several advanced features such as setting a daily transaction limit for corporate
users, setting transaction limits for individual beneficiaries, prioritising payment
methods, online stop payment and cancellation facilities.

CORPORATE CREDIT

Axis Bank has built a strong corporate banking franchise across corporate,
liability and asset businesses. Axis Bank provides customized structuring and
financing solutions in a timely and comprehensive manner to its corporate customers
with a focus on building out a high quality credit portfolio. The Bank is a market
leader in Debt Capital Markets and loan syndication business across segments, sectors
and geographies. The Bank also provides full range of Treasury and Trade Finance

15
solutions to its corporate clients. The Bank offers technology enabled transaction
banking and cash management services to customers across Government, financial
institutions and corporate segments.

Bank’s infrastructure business includes project and bid advisory services,

project lending, debt syndication, project structuring and due diligence, securitisation
and structured finance. During the year the Bank launched its first ever ‘D&B-Axis
Bank Infra Awards 2011’ in association with Dun & Bradstreet. The award felicitates
leading infrastructure projects and infrastructure companies. In October 2010, the
Bank launched the Axis Infra Index (AII) with the primary objective of conveying a
sense of investment conditions in the infrastructure sector. The Index, as a composite
measure of investor confidence, comprises four components flow of equity and debt
funds into infrastructure sectors, project completion and commencement of
operations, output related to infrastructure segments and regulatory and policy
developments relevant for the sector. It is designed to capture the evolving
fundamentals of the sector and is updated and disseminated on a quarterly basis.

16
 CHAPTER-III
DATA ANALYSIS & INTERPRETATION
 Housing Loan for Scheme for resident individuals

Balance outstanding (Rs. NPA (Rs. In

YEAR
In lakhs) lakhs)

2020-2021 65380.87 2540.29

2021-2022 72675.82 3206.81

2022-2023 83600.25 2724.05

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 65,380.87 Lakhs and
2540.29 lakhs respectively. But in the year 2021 there was a slight increase in both
balance outstanding and NPA which was 72675.82 and 3206.81 respectively. But in
the year 2022 again balance outstanding and NPA increased to Rs 83600.25 lakhs and
Rs 2724.05 lakhs.

17
 Housing Loan for Scheme for resident individuals

90000
83600.25
80000
72675.82
70000 65380.87

60000

50000
Balance outstanding (Rs. In
lakhs)
40000
NPA (Rs. In lakhs)
30000

20000

10000
2540.29 3206.81 2724.05
0
2020-2021 2021-2022 2022-2023

From the above graph it is clear that, issue of loan has been increased simultaneously
their NPA amount has been decreased. By this we can interpret that their recovery of
loans & advances is effective in this type of loan.

18
 Housing Finance for NRIs Housing loan scheme for NRI’s

Balance outstanding NPA (Rs. In

YEAR
(Rs. In lakhs) lakhs)

2020-2021 1402.79 2.82

2021-2022 1407.23 0.00

2022-2023 1786.62 6.16

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 1402.79 Lakhs and 2.82
lakhs respectively. But in the year 2021 there was a slight decrease in balance
outstanding which was 1407.23. But in case of NPA it case decreased to 0.00. In the
year 2022 again balance outstanding and NPA increased up to Rs 1786.62 lakhs and
Rs 6.16 lakhs.

19
 Housing Finance for NRIs Housing loan scheme for NRI’s

2000
1786.62
1800

1600
1402.79 1407.23
1400

1200
Balance outstanding (Rs. In
1000 lakhs)
800 NPA (Rs. In lakhs)

600

400

200
2.82 0 6.16
0
2020-2021 2021-2022 2022-2023

By analyzing the above graph we can say that, the bank has reduced lending
loan in this type of loan might be due to less chances of recovering loan where the
NPA has been increased suddenly. So we can interpret that, the recovery of loans &
advances is little less in this type of loan.

20
 Car Loan Car Finance Scheme

Balance outstanding (Rs. NPA (Rs. In

YEAR
In lakhs) lakhs)

2020-2021 45658.00 473.57

2021-2022 51658.55 613.93

2022-2023 59568.56 575.70

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 45658.00 Lakhs and
473.57 lakhs respectively. But in the year 2021 there was an increase in both balance
outstanding and NPA which was 51658.55 and 613.93 respectively. In the year
2022there is an increase of balance outstanding by Rs 59568.56 lakhs and NPA
decreased to Rs. 575.70 lakhs.

From the above analysis it is clear that, the bank has increased its lending, as
the bank is quite good in recovering the issued loans. So we can interpret that, the
recovery of loans and advances is quite good in this type of loan.

21
 Car Loan Car Finance Scheme

70000

59568.56
60000
51658.55
50000
45658

40000
Balance outstanding (Rs. In
lakhs)
30000 NPA (Rs. In lakhs)

20000

10000

473.57 613.93 575.7

0
2020-2021 2021-2022 2022-2023

From the above analysis it is clear that, the bank has increased its lending, as
the bank is quite good in recovering the issued loans. So we can interpret that, the
recovery of loans and advances is quite good in this type of loan.

22
 Professional loan for lawyers, charted accountant, etc.

Balance outstanding (Rs. NPA (Rs. In

YEAR
In lakhs) lakhs)

2020-2021 696.52 97.25

2021-2022 716.80 76.16

2022-2023 782.06 52.52

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 696.52 Lakhs and
97.25 lakhs respectively. But in the year 2021 there was a slight increase in both
balance outstanding and NPA which was 716.92 and 76.16 respectively. In the year
2022 there is an increase of balance outstanding by 782.06lakhs and NPA decreased
to Rs52.52lakhs.

From the above graph it is clear that, the bank has increased its lending, as
they are good in recovering the issued loans and advances. So we can interpret that,
the effective recovery of loans exists in this type of loan.

23
 KBL Udyog Mithra Professional loan for lawyers, charted
accountant, etc.

900

800 782.06
696.52 716.8
700

600

500
Balance outstanding (Rs. In
lakhs)
400
NPA (Rs. In lakhs)
300

200
97.25 76.16
100 52.52
0
2020-2021 2021-2022 2022-2023

Working capital loans for traders, agents etc.

24
 YEAR Balance
outstanding (Rs. NPA (Rs. In lakhs)
In lakhs)

2020-2021 15240.80 1648.19

2021-2022 16664.65 1740.56

2022-2023 18535.51 791.25

ANALYSIS& INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 15240.80 Lakhs and
1648.19 lakhs respectively. But in the year 2021 there was a slight increase in both
balance outstanding and NPA which was 16664.65 and 1740.56 respectively. In the
year 2022 there is an increase of balance outstanding by Rs 18535.51 lakhs and NPA
decreased to Rs 791.25lakhs.

working capital loans for traders, agents etc.

25
 20000
18535.51
18000
16664.65
16000 15240.8

14000

12000
Balance outstanding (Rs. In
10000 lakhs)
8000 NPA (Rs. In lakhs)

6000

4000

2000 1648.19 1740.56

791.25
0
2020-2021 2021-2022 2022-2023

From the above graph it is clear that, the bank has increased its lending, as they are
good in recovering the issued loans and advances. So we can interpret that, the
effective recovery of loans exists in this type of loan.

26
 KBL Easy Ride Two wheeler Loan

YEAR Balance outstanding NPA (Rs. In

(Rs. In lakhs) lakhs)

2020-2021 2883.41 179.69

2021-2022 2596.76 173.96

2022-2023 2851.46 150.88

ANALYSIS& INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 2883.41 Lakhs and
179.69 lakhs respectively. But in the year 2021 there was a slight decrease in both
balance outstanding and NPA which was 2596.76 and 173.96 lakhs respectively. . In
the year 2022 there is an increase of balance outstanding by Rs 2851.46 lakhs and
NPA decreased to Rs 150.88 lakhs.

27
 KBL Easy Ride Two wheeler Loan

3500

3000 2883.41 2851.46

2596.76
2500

2000
Balance outstanding (Rs. In
lakhs)
1500 NPA (Rs. In lakhs)

1000

500
179.69 173.96 150.88
0
2020-2021 2021-2022 2022-2023

From the above graph it is clear that, the bank has increased its lending, as
they are good in recovering the issued loans and advances. So we can interpret that,
the effective recovery of loans exists in this type of loan.

28
 KBL Vidhyanidhi Educational loan

YEAR Balance outstanding NPA (Rs. In

(Rs. In lakhs) lakhs)

2020-2021 5549.43 53.09

2021-2022 7356.09 137.54

2022-2023 9268.13 159.26

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 5549.43 Lakhs and
53.09 lakhs respectively. But in the year 2021 there was a slight increase in both
balance outstanding and NPA which was 7356.09 and 137.54 respectively. In the year
2022 both balance outstanding and NPA increased to Rs 9268.13lakhs and 159.26
lakhs.

29
 Educational loan

10000
9268.13
9000

8000
7356.09
7000

6000 5549.43
Balance outstanding (Rs. In
5000 lakhs)
4000 NPA (Rs. In lakhs)

3000

2000

1000
53.09 137.54 159.26
0
2020-2021 2021-2022 2022-2023

In this type of loan the bank is still issuing loans even though their recovery is
low. So we can understand that, the recovery of loan in this type is little less.

30
 Loan to Salaried Persons Loan for permanent employees of any
reputed institutions

YEAR Balance outstanding NPA (Rs. In

(Rs. In lakhs) lakhs)

2020-2021 15098.86 1503.33

2021-2022 8831.93 1506.51

2022-2023 7765.15 890.08

ANALYSIS & INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 15098.86 Lakhs and
1503.33 lakhs respectively. But in the year 2021 there was a slight decrease in both
balance outstanding and NPA which was 8831.93 and 1506.51 respectively. In the
year 2022 both balance outstanding and NPA have decreased to Rs 7765.15 lakhs and
Rs 890.08 lakhs.

31
 Loan to Salaried Persons Loan for permanent employees of any
reputed institutions

16000 15098.86

14000

12000

10000
8831.93
7765.15 Balance outstanding (Rs. In
8000 lakhs)
NPA (Rs. In lakhs)
6000

4000

2000 1503.33 1506.51

890.08
0
2020-2021 2021-2022 2022-2023

From the above table and graph we can understand that, even though the
recovery of loans is effective, the bank has reduced its lending. So we can interpret
that, the recovery of loans and advances is good in this type of loan.

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 loan for purchasing gold ornaments, bars and coins etc

YEAR Balance outstanding NPA (Rs. In

(Rs. In lakhs) lakhs)

2020-2021 205.63 17.57

2021-2022 201.64 21.64

2022-2023 132.15 20.24

ANALYSIS& INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 205.63 Lakhs and 17.57
lakhs respectively. But in the year 2021 there was a slight decrease in both balance
outstanding and NPA which was 201.64 and 21.64 respectively. In the year 2022
there is a decrease in both balance outstanding and NPA of Rs 30.57 lakhs and Rs
20.24 lakhs.

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 loan for purchasing gold ornaments, bars and coins etc

250

205.63 201.64
200

150
132.15
Balance outstanding (Rs. In
lakhs)
100 NPA (Rs. In lakhs)

50
17.57 21.64 20.24

0
2020-2021 2021-2022 2022-2023

From the above table it is clear that, the bank has reduced issuing this type of loan
and the NPA has also reduced, so we can clearly say that the recovery of this type of
loan is effective.

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loan to persons aged above 18 years for consumption purpose

YEAR Balance outstanding NPA (Rs. In

(Rs. In lakhs) lakhs)

2020-2021 3048.22 28.53

2021-2022 2170.31 46.82

2022-2023 3602.75 15.13

ANALYSIS

In the year 2020 balance outstanding and NPA were Rs. 3048.22 Lakhs and 28.53
lakhs respectively. But in the year 2021 there was a slight decrease in both balance
outstanding and NPA which was 2170.31 and 46.82 respectively. In the year 2022
there is an increase of balance outstanding by Rs 3602.75 lakhs and NPA decreased
to Rs 15.13 lakhs.

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 loan to persons aged above 18 years for consumption purpose

4000
3602.75
3500
3048.22
3000

2500
2170.31
Balance outstanding (Rs. In
2000 lakhs)
NPA (Rs. In lakhs)
1500

1000

500
28.53 46.82 15.13
0
2020-2021 2021-2022 2022-2023

From the above table it is clear that, the amount of loan issued this year is more in
comparison with the last year. It is also clear that, the recovery of loans is effective,
as the NPA has also been reduced from last year

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 Loan for purchasing vehicles like cars, bus etc

YEAR Balance outstanding (Rs. NPA (Rs. In

In lakhs) lakhs)

2020-2021 15916.61 400.32

2021-2022 17183.99 619.01

2022-2023 15177.28 614.87

ANALYSIS& INTERPRETATION

In the year 2020 balance outstanding and NPA were Rs. 15916.61 Lakhs and
400.32 lakhs respectively. But in the year 2021 there was a slight increase in both
balance outstanding and NPA which was 17183.99 and 619.01 respectively.

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 Loan for purchasing vehicles like cars, bus etc

20000

18000 17183.99
15916.61
16000 15177.28

14000

12000
Balance outstanding (Rs. In
10000 lakhs)
8000 NPA (Rs. In lakhs)

6000

4000

2000
400.32 619.01 614.87
0
2020-2021 2021-2022 2022-2023

In the year 2022 there is an increase of balance outstanding by Rs 15177.28

lakhs and NPA decreased to Rs 614.87 lakhs.

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 CHAPTER-IV
FINDINGS, CONCLUSIONS
AND SUGGESTIONS
 FINDINGS

The bank has been focusing on containing the non performing assets through better
credit monitoring as well as intensified drive for the recovery of the impaired assets,
asset recovery branches and steps under SARFAESI Act 2002 for the speedy
takeover and disposal of the assets of defaulting borrowers resulted in reduction of
gross NPA Rs. 284 crores to Rs. 171 crores.

1. The bank has a good lot of finance and well written procedure for the purpose
of lending of advances to the borrowers.

2. They have the right to take appreciable collateral security against advances, to
demand any type of document related with them, to file a suit against
borrower if needs and also can seek the help from the consulting firms for
their own purpose, mainly for the feasibility study of the project.

3. They have the power of rejecting the proposal as per the appraisal of the
projects and also have power to monitor, inspect and visit the industry.

4. Advances of bank are not safe after lending the amount due to uncertainty;
also the uncertainty affects the viability of the projects.

5. Proper monitoring and follow up the project is lagging. Also the procedure of
lending is detail but due to some flaws, accounts are converting into NPA.

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 CONCLUSIONS

As analyzed in the analysis and interpretation part the following conclusions have
been drawn.

1. In the majority of the cases both the banker and borrower are responsible to
become an account NPA. The reasons may be different in their own sides.

2. The problem of NPA is behavioral as well as economic in nature.

3. Due to lagging in proper realizable security from the borrowers, banks are
facing difficulty to recover its loans and advances.

4. The monitoring mechanism of the bank is one of the reasons to become an

account NPA.

5. After lending the amount, the attitude of the lender and borrower are changing
due to some circumstances.

6. The borrowers are turning towards willful defaulters due to some problem in
procedure of debt realization.

7. They have continuous monitoring and follow up deficiency.

8. Bankers are lagging in continuous check, inspections, guiding to borrowers as

there are the right of the banks.

9. At the time bank can ask for the required information as they needed for the
performance evaluation of the project.

10. From the bankers’ side the main fault is not having proper security or
adequate security in some cases.

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 SUGGESTIONS

The following suggestions have been made for the purpose of reducing NPA in
Banking Sectors

 To reduce the risk of lending, the bank should never lend their loans and
advances without adequate collateral securities. This will reduce the major
risk of the banks.
 The bank should monitor and follow up the project in which they have lended
their resources.
 The project appraisal must be perfectly made before sanctioning the loan. This
will help in reinforcing the project oneself to commit a wrong decision.
 There should not be any type of pressure and influence from any top and emir
persons for the sanction of loan and advances. This will enhance the
efficiency of the offers and create clear and fair environment to work in the
organization.
 There should not be ny unethical practices by any of the officers of the banks.
They should perform their duty and responsibility very well. Ultimately it will
increase the performance of the bank.
 Bankers should be given the power to enforce the security without
approaching the judiciary which would take a long time for settlement. This
will save the time of settlement of cases.
 The bankers should have to in continuous touch with the borrowers so that
their attitude should not change towards the bank. This will motivate the
borrower that bankers are taking care of them.
 The communication between the bankers and the borrowers of all activities
like transaction of business and other financial activities should always be
well known. This will help the bankers to find the present financial conditions
of the
 Borrowers will ultimately helps the banker to take required decision about the
project, if needed it can solved by the utilization of the internet.

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BIBLIOGRAPHY
 BIBLIOGRAPHY

BOOKS
 IM Pandey, Financial management, Vikas Publishing Houses Pvt ltd 2006, 9th
edition
 Magnus School of business, financial management, 2006
 Prasanna Chandra, Financial management, Tata McGraw Hill Publishing
company ltd, 5th edition, 2005
 R.P. Trivedi & Manoj Trivedi, Cost and management accounting, Pankaj
Publications, first edition, 2002

WEBSITES
 www.mbaguys.net
 www.ask.com
 www.wikipedia.org
 www.google.co.in

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