SECTORIAL ANALYSIS OF NPAS IN NAINITAL BANK LTD, A LOCAL AREA SCHEDULED COMMERCIAL BANK IN UTTARAKHAND

摘要

In the present financial world, non-performing asset (NPA) is not a buzz word only rather it has become the a serious concern to the entire banking industry which reflects the performance of the bank, this chronic problem have raised the a prime question of the survival before every Indian commercial bank irrespective to their ownership, management & control either as a public sector or a private sector bank. These NPAs grab upon a large share of profit and net worth, which turn out to be an ultimate loss to the banks besides the stake holder value. As soon as the volume of NPAs in any bank is increase with a rapid pace the bank runs out of liquidity. NPA, the two edged weapon, the first edge it stops earnings on the account in form of interest & other charges etc and at the other as per RBI's IRAC guidelines which imposes upon the bank to make a huge sum of provisions from already P & L account, ultimately likewise this weapon adversely affects not only theoverall profits but also restricts the business cycle of the bank of credit & advances portfolio which will ultimately cripple the banking industry. The crash of the banking sector will severely hamper the functioning of other sectors of the economy of the nation through unfavourable effects on various growth parameters like GDP, Unemployment Rate and PCI etc. Keeping in view the impact of NPAs, a banker should be quite cautious while lending loan & credit to any sector, since the funds being landed is the public money mobilised by the bank in form deposits, corporate bonds, debentures, government shares etc Due to the imprudent credit decisions of the banking system is one of the paramount reasons of mounting NPAs are year by year. On the basis of all above cause the present study is conducted to examine the credit expanded in different sectors and the reasons for becoming them NPA in Nainital Bank Limited, operating in Uttarakhand and to give suitable suggestions to overcome the mentioned problem.