A Study on Management of Non Performing Assets in Priority Sector Reference to Indian Bank and Public Sector Banks (PSBs)

B.Selvarajan; G. Vadivalagan

A Study on Management of Non Performing Assets in Priority Sector Reference to Indian Bank and Public Sector Banks (PSBs)

B.Selvarajan * §

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Dr. G. Vadivalagan ‡

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§ Anna University, Chennai

‡ Dhanalakshmi Srinivasan College Of Engineering, Nava...

A Study on Management of Non Performing Assets in Priority Sector Reference to Indian Bank and Public Sector Banks (PSBs)

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Abstract

In India the magnitude of the problem of bad debts was not taken seriously. Subsequently, following the recommendations of Narasimham committee and Verma committee, some steps have been taken to solve the problem of old NPAs in the balance sheets of the banks. It continues to be expressed from every corner that there has rarely been any systematic evaluation of the best way of tackling the problem. There seems to be no unanimity in the proper policies to be followed in resolving this problem. There is also no consistency in the application of NPA norms, ever since these have been recognized. Non Performing Assets are also called as Non Performing Loans. It is made by a bank or finance company on which repayments or interest payments are not being made on time. A loan is an asset for a bank as the interest payments and the repayment of the principal create a stream of cash flows. It is from the interest payments that a bank makes its profits. The problem of NPA is not limited to only Indian public sector banks, but it prevails in the entire banking industry. Major portion of bad debts in Indian Banks arose out of lending to the priority sector at the dictates of politicians and bureaucrats. If only banks had monitored their loans effectively, the bad debt problem could have been contained if not eliminated. The top management of the banks was forced by politicians and bureaucrats to throw good money after bad in the case of unscrupulous borrowers. Agriculture advances have registered a 7 fold net increase, SSI advances have set a record net increase of 8.5 times and the advances to other priority sector have made a net increase of 4.5 times, that of their respective figures in 2001-02.

References

27 Cites in Article

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

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How to Cite This Article

B.Selvarajan, Dr. G. Vadivalagan. . "A Study on Management of Non Performing Assets in Priority Sector Reference to Indian Bank and Public Sector Banks (PSBs)". Global Journal of Management and Business Research GJMBR Volume 13 (GJMBR Volume 13 Issue 38).

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GJMBR Volume 13 Issue 38

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

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Classification

GJMBR Classification FOR Code: 750605

Submission ReceivedJanuary 5, 2013
Peer Review Double Blind
Handling Editor
Accepted January 26, 2013
Published November 5, 2013

Version of record

v1.2

Issue date

November 5, 2013

Language

English

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Total Score: 159

Country: India

Subject: Global Journal of Management and Business Research

Authors: Dr. B.Selvarajan, Dr. G. Vadivalagan (PhD/Dr. count: 2)

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