Free MBA Projects & Thesis

MBA Projects & Thesis => Finance Projects => Topic started by: Guru on April 16, 2017, 06:22:16 AM

Title: Study of Trends & Effectiveness of Non-Performing Assets Recovery Measures
Post by: Guru on April 16, 2017, 06:22:16 AM
MBA Project on Study of Trends & Effectiveness of Non-Performing Assets Recovery Measures

Non Performing assets means the debt which is given by the Bank is unable to recover it is called NPA. Non-Performing Asset [NPA] is a result of Asset-Liability Mismatch, A NPA account in the books of accounts is an asset as it indicates the amount receivable from the Defaulters. It means if any bank gives loan to the customer if the interest for that loan is not paid by the customer till 90 days then that account is called as NPA account.

A loan or lease that is not meeting its stated principal and interest payments. Banks usually classify as nonperforming assets any commercial loans which are more than 90 days overdue and any consumer loans which are more than 180 days overdue. More generally, an asset which is not producing income.

Types of NPAs

Gross NPA: Gross NPA is an advance which is considered irrecoverable, for bank has made provisions, and which is still held in banks' books of account. Net NPA is obtained by deducting items like interest due but not recovered, part payment received and kept in suspense account from Gross NPA.

Gross NPAs are the sum total of all loan assets that are classified as NPAs as per RBI Guidelines as on Balance Sheet date. Gross NPA reflects the quality of the loans made by banks. It consists of all the nonstandard assets like as sub-standard, doubtful, and loss assets.

Net NPA: Net NPAs are those type of NPAs in which the bank has deducted the provision regarding NPAs. Net NPA shows the actual burden of banks. Since in India, bank balance sheets contain a huge amount of NPAs and the process of recovery and write off of loans is very time consuming, the banks have to make certain provisions against the NPAs according to the central bank guidelines

Source: (