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PROJECT SYNOPSIS OF NON PERFORMING ASSETS INTRODUCTION: Non Performing Assets (NPAs) have become a subject of major concern

for Banking Sectors and Financial Institutions in the last few years. It is the crucial factor that decides the performance of the Bank's and Financial Institutions. Non Performing Assets are those loans given by a Hank or Financial Institution where the borrower defaults or delays interest or principal repayment. Thus it negates the effectiveness of the process of the credit cycle. Non-recovery also affects the profitability of a Financial Institution, besides being required to maintain more own funds by way of capital and creation of reserves and provisions to act as cushion for the Joan losses. Even though complete elimination of such losses is not possible, Financial Institutions need to keep the losses at a low level. In Tact, it is the level of n on-per forming assets which, to a great extent, shows the performance and efficiency of a Financial Institution. Mounting NPAs may also have more wide spread repercussions.

What is a performing asset? A Loan /Advance asset is considered to be 'performing1 as long as prompt realization of the interest /installments f i n case of term loans) which are credited to the advance account periodically. What is a Non Performing Asset? Loan/Advance assets will be deemed to be a Non-Performing Asset when there is a) a default in payment of interest amounts OR b) The repayment of principal (in case of Term Loans) has become past due or both remain unpaid for a period of two quarters or more. What is a past due? A Credit facility becomes PAST DUE if any demand is over due after 30 days from the due date, Standard Asset:

Standard asset is one which does not disclose any problem and which does not carry more than normal risk attached to the business, Non Performing Asset: Any credit facility in respect of which interest or installment has remained unpaid for a period of two quarters or more from the date it has become past due is regarded as a non performing asset A Non Performing Asset may be classified as: i) Sub standard asset: It is one which has not completed a period of two years after getting classified as a nun performing asset. Unless there is threat of loss or recoverability of the advance is in doubt a technical or a temporary deficiency in an otherwise standard asset should not lead to the conclusion that the asset is to be treated as a sub standard or a NPA. ii) Doubtful assets: It is one which remains as sub Standard or NPA continuously for more than two years where security cover is available. iii) Loss assets: It is one which is sub standard continuously for more

than two years where: security is nor available.


The purpose of the study is to make an analysis of the NPAs in SBI and to know why and how they should be reduced and how they can be efficiently managed.


To study the causes of Non Performing Assets in State bank of India

To study the impact of NPAs on efficiency and profitability of S.B.I

To suggest the ways to reduce NPAs in S.B.I


The scope of the study has been limited to the aspects of NPAs in SBI BANK only for the year 2008-2012 and an attempt was made to suggest the ways and means to improve the position and reduce The level of NPAs in SBI



The main source of data is secondary data, which is gathered from various sources like.

1) Books

2) Documents of Banks relating ot NPA s

3) Annual reports of Banks

Personal interviews with the staff helped in acquiring some data regarding the corporation and about the subject.

PERIOD OF THE STUDY: The period of the study is confined to six weeks i.e., 45 days.