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A Comparative Study of NPA of State Bank of India Group & Nationalized Banks Dr. Tanmaya Kumar Pradhan, Asst. Professor, Dept. of Economics, NM Institute of Engineering and Technology, Sijua, Patrapada, Khandagiri, Bhubaneswar, Orissa, India. Abstract: Gross NPA of both SBI group & Nationalised Banks exhibit an increasing trend except the year 2008 of Nationalised Banks. As risk management becomes more sophisticated, the simple and static rules of 1998 Accord are becoming less relevant, Emphasis needs to be given on innovative banking. Autonomy is a sine qua non of innovation. Which needed a new capital framework and ways to manage risks. To solve these problems, Basel-II framework is an indicator approach for risk management. The study is based on the secondary data. The scope the study is limited to five years data. The study is related to SBI group and Nationalised banks. KEY WORDS: NPA, GROSS NPA, OVER HANG & BANKS 1. Introduction:- Financial sector reform was undertaken early in the reform cycle in India. However, the banking sector reforms were not driven by any immediate crisis as has often been the case in several emerging economies. The design and detail of the reform were evolved by domestic expertise, while taking on board the international experience in this regard. And, enough space was created for the growth and healthy competition among public and private sectors as well as foreign and domestic sectors. The Government preferred that public sector banks manage the over-hang problems of the past rather than cleanup the balance sheets with support of the Government. It was also felt that there is enough room for growth and healthy competition for public and private sector banks as well as foreign and domestic banks. The twin governing principles are non-disruptive progress and consultative process. In order to ensure timely and effective implementation of the measures, RBI has been adopting a consultative approach before introducing policy measures. Suitable mechanisms have been instituted to deliberate upon various issues so that the benefits of financial efficiency and stability percolate to the common person and the services of the Indian financial system can be benchmarked against international best standards in a transparent manner. 2. Objectives:- (i) To determine gross NPA of SBI group and Nationalised banks. (ii) To study Basel Committee-II Recommendations (iii) To suggest measures to curb the growing NPA 3. Methodology:- The study is based on the secondary data. The scope the study is limited to five years data. The study is related to SBI group and Nationalised banks. 3.1 Gross NPA of SBI group & Nationalised Banks(Amount in Lakh) Year Gross NPA SBI Group Gross NPA Nationalised Banks 2007 1226000 2629100 2008 1503700 2511900 2009 1881255 2680380 2010 2133767 3547031 2011 2814002 4290739 Source: Department of Banking Supervision, RBI www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 06, April-2013 Page 24
The Table 3.1 shows that gross NPA of both SBI group & Nationalised Banks exhibit an increasing trend except the year 2008 of Nationalised Banks. 3.1 Basel Committee-II Recommendations Advancement in technology, telecommunications and markets have changed the way banks collect, measure and manage their risks. As risk management becomes more sophisticated, the simple and static rules of 1998 Accord are becoming less relevant, Which needed a new capital framework and ways to manage risks. To solve these problems, Basel-II framework is an indicator approach for risk management. Basel-II Consists of three mutually reinforcing pillars. The first pillar aligns the minimum capital requirements more closely to banks actual underlying risks. It will be helpful in credit rating of risks on the basis of external measures issued by external rating agencies. The second pillar –supervisory review – allows supervisors to evaluate each bank’s assessments of its own risks and to determine whether these assessments are reasonable or not. The third pillar – market discipline – recognizes the power of marketplace participants to motivate prudent risk management, which leads to enhancing transparency in bank’s financial reporting. Each pillar provides something that the other two can not . So it is suggested that each is essential to achieve overall objective of financial stability. Hence, implementation of Basel – II in Indian banking sector will help to focus on risk, to improve skills in measuring and managing the risks and to enhance efficiency. 3.2 Suggestions to curb NPA The findings of the study make it abundantly clear that banking sector reforms have strengthened the Indian banking system which has come up to meet the challenges emerging from global competition. But the menace of NPA has not completely gone. The severity of the problem has been reduced to some extent. Banks are now no longer functioning under the protected environment. Therefore, their very survival depends upon their economic viability. One of the major source of NPA has been priority sector lending under different schemes of the government. Sometime in the past the populist approach of democratically elected government with regard to rural credit puts the bank in trouble. Therefore, NPA arising out of priority sector lending should not be reflected in the performance assessment of banks nor in the estimation of NPA. The high percentage of NPA erodes public confidence in the performance of the banks. Non inclusion of NPA arising out of non payment of priority sector loans would provide a proper yardstick for the measurement of efficiency as well as accountability of banks. Another major obstacle in the way of efficient functioning of banks has been the sluggish legal system of our country. Debt Recovery Tribunals should be converted in to special courts with the power of the high courts, the appeal against which can only be heard by the Supreme Court. The present system of internal vigilance of banks needs to be strengthened with adequate power conferred on the management to deal with cases of fraud and misappropriation by members of staff. Emphasis needs to be given on innovative banking. Autonomy is a sine qua non of innovation. Every branch head should have the autonomy to decide upon the credit delivery & loan recovery www.theinternationaljournal.org > RJEBS: Volume: 02, Number: 06, April-2013 Page 25
Page 2 and 3: Table of Contents Articles PERFORMA
Page 4 and 5: servicing, and the policies not mee
Page 6 and 7: The Self-Help Group members get inc
Page 8 and 9: Are female workers more productive
Page 10 and 11: For the purpose of including explan
Page 12 and 13: several different, competing logist
Page 14 and 15: Fisher, R.T. (2001), “Role stress
Page 18 and 19: processes. Instead of fixing target
Page 20 and 21: Agriculture Crisis and Sustainable
Page 22 and 23: Table 1. World Cereal production ,
Page 24 and 25: Expanding biofuel production The ex
Page 26 and 27: percent of the world’s population
Page 28 and 29: OECD (Organisation for Economic Co-
Page 30 and 31: It can provide the earnings needed
Page 32 and 33: The incubator will also work toward
Page 34 and 35: factor. This is not an easy proposi
Page 36 and 37: ROLE OF LOCAL SELF GOVERNMENT IN LE
Page 38 and 39: During the last season red onion fa
Page 40 and 41: Table Mch2 Coef. Std. Err Z P>/Z/ A
Page 42 and 43: lack of capital. The local farmer o
Page 44 and 45: It may be seen that alleviation of
Page 46 and 47: Table - 2 Progress under Bharat Nir
Page 48 and 49: References Chandrasekhar, B P., et
Page 50 and 51: existing cooperative legislation, r
Page 52 and 53: 1.3 THE RESEARCH QUESTIONS 1. What
Page 54 and 55: Table 2: Earnings and Cost Allocati
Page 56 and 57: have an adequate amount of capital
Page 58 and 59: programs and the union was doing on
Page 60 and 61: total assets to other key areas, it
Page 62 and 63: esponded by (7.6%) of the members.
Page 64 and 65: management; Gohe cooperatives savin
Page 66 and 67:
Significance of asset quality of St
Page 68 and 69:
iii) iv) Doubtful Assets:- a) Doubt
Page 70 and 71:
atios and solvency ratios are taken
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Ratio of around 3% during 2007-08,
Page 74 and 75:
sufficient to draw an inference in
Page 76 and 77:
The observed R 2 and F statistics m
Page 78 and 79:
Board Composition, Ownership Struct
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size as well. During our study it w
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standards prevailing in the country
Page 84 and 85:
The procedure produces two tests of
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hoc test for pair wise comparisons
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e said that the board size affects
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high-tech small and medium-sized en
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Table no.8 - Multiple Comparisons T
Page 94 and 95:
Abstract Corporate Social Responsib
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the participation of various level
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Supplier Relations As stakeholders
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CSR initiatives of companies should
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Corporate Social Responsibility Pra
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2011, this district received surplu
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In the case of marginal farmers and
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Findings From the above analysis it
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2. Innovation: Meaning and Dimensio
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data appropriately. Inferences were
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The regression analyses as shown in
Page 116 and 117:
Role of Self-help Group in Socio-ec
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10% for women and men respectively
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MoRD has been constantly reviewing
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76.6% units were found to be existi
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10.Timely release of adequate loans
Page 126 and 127:
Standard of living of Rural Fisher
Page 128 and 129:
Table 1 denotes the infrastructure
Page 130 and 131:
FISHING METHODS USED BY DIFFERENT A
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CONCLUSION Most of the fisher folk
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Objectives: The following objective
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Policies of the Government will hav
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Wastage Schedule (Onion) Sl.No. Pri
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At the end of 2008 the entire world
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Conclusion: 9. The inflation can be
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