Beruflich Dokumente
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Luther, J.C.(1976)', chaired the committee appointed by the Reserve Bank of India
to study the productivity, efficiency and profitability of commercial banks. The
committee analysed the various issues like planning, budgeting and marketing in
commercial banks.
Matbur, O.P. (1977)'~ conducted a study on "Public sector banks in India-A case
study of State Bank of India". The main finding of his study was that the State Bank
of India, in its two decades of service, has accelerated the growth of Indian economy
in two significant ways: (i) by pursuing the policy of vigorous branch expansion in
general and its rural orientation in particular, and (ii) by playing a leading role in
introducing bank credit facility to the new fields of the priority sectors of the Indian
economy. The bank has also played a leading role in developing the backward regions
of the country.
Varde et a1 (1983)", has edited the studies conducted by the National Institute of
Bank Management on the profitability of commercial banks and has compiled them in
a short book titled "Profitability of commercial banks". The book covers different
issues related to profitability of banks like profit management, productivity, profit
planning in banks, monitoring profitability of bank branches, measuring cost of funds
for banks, matching revenues and Cos$ of commercial banks and operating cost of
rurrllbankhg.
Aogrdl, V.B. and Devraj, Vd. (198319,in their papa they revealed that the
difference in cost of working funds (deposits), interest earning, social banking, fund
management, earnings from sour& other than interest, expansion of banking
business, retail banking services, as the main factors contributing to difference in
productivity and profitability ratios of the bank groups. The author concluded that in
the prevailing circumstances, changes in interest rates on deposits and credit, have a
J
decisive impact on earnings and expenses and, consequently, on the profitability of
banks.
Singh (1987)1°, stated that the profitability of the banking system has been subject to
many exogenous factors, and the important ones are: continuous increase in the SLR,
CRR, persistent emphasis on social goals, growing incidence of industrial sickness,
rapid branch expansion in unbanked and under banked rural areas, unfavorable
change in the deposit mix and growing incidence of financial disinter mediation.
Chopra, Kiran (1987)11, in his research work, "Managing profits, profitability and
productivity in public sector banking", studied about the emerging trends in the
profits and profitability of some select public sector banks at micro level. It
highlighted the n& for the introduction of essential management technique for the
better management of profits and profitability of public sector banks,
Rno, H.P. (1989)14, has made a comparison of business ratios, between the profit
makmg and loss incuning rural branches of a nationalized bank for the year 1986.
The author opined that the chief &a for less profit is the low volume of business
and suggested that monitoring the bmk-even business level for the banking sector is
of great importance for inlpving profitability.
38
Nsidu, K. MPairathnun (1989)", in his study on "Steady progress in the Bankiig
Sector", has made an attempt to critically analyse the growth as well as the role of
banking in rural development in India. It was observed that after Nationalization, the
banking system made rapid strides in branch expansion, deposit mobilization and
credit deployment. It was concluded that regional rural banks have done well in
achieving their targets in the past years, y d have the potential to stand on their own,
without any link to a sponsored bank.
Panda, J. and LaU, G.S. (1991)", in their research paper they have attempted to
develop certain internal management techniques for improving the profitability of the
Indian banking system. The authors have identified productivity, development of
funds, quality of advances, information system and organizational setup and branch
expansion policy as the most important factors influencing the profitability.
Kothari, C.R (1991)", in his research work entitled "Indian Banking: Social
Banking and Profitability", analysed the extent of social banking through dand
semi-ban branches to total branches, priority sector advances, and differential rate.
of interest (DRI) advances to total a$mces. He also studied the profitability position
by applying Spearman's rank m l a t i o n co-efficient and anal@ thcl operational
efficiency of bank branches and identified the emerging challenges before banks and
made some important suggestions.
Chandra, M. (1992)11, has studied the profitability aspects of public sector banks. In
his study he highlighted that the step-motherly treatment being meted out to public
sector banks in spite of their predominant role in mobilizing resources and substantial
contribution made to the society and concluded that despite massive working funds,
public sector banks were not able to show better results due to high cost of operation
on account of priority sector advances and more than 56 per cent branches being mral.
Toor, N.S. (1993)", has made an attempt to find a link between the nature of business
being handled by banks and their earnings of nationalized banks. The Various aspects
of the business mjx like deposits (category wise), advances (nature wise category),
expenditure incurred on deposits and income earned on advances have been examined
and discussed by the author. The business mix in the nationalized banks is of highly
varying in degree and it certainly has a bearing on their operational efficiency and
profitability trend, the author opined. In the coming years, banks have to be alive to
the type of business they are handling with reference to the cost and benefit from such
business, he concluded.
Ramrchmdran, RS. and KaverA, VS. (1994)*, have conducted a study during
1993 in a nationalized bank in Mabarashtra to understand the difficulties in
management of fouad tha! the bonuwer accounts (i.e. edactcd NPA accounts for the
study) showed signals of sickncsa such as cash
41
managerial deficiencies, disputd among partners, and the like. In almost all the cases
the bank did not take prompt corrective action either to m v e r the dues or in filing
suits against the defaulten or to initiate recovery proceedings on deaeed suits. Most
of the comments in the branch inspection reports were related to the irregularities in
the documentation. All branch managerslofficers agreed that there is a neod for
strengthening the appraisal system with special reference to the managerial
capabilities of the borrowers. This reco6mendation is valid for d u c i n g the volume
of NPAs though the study is limited to one bank and a few NPA accounts in one state.
Kaveri, V.S. (199~)~',in her article entitled "Relationship betwm recovery and
Profitability of Bank-A study", applied macro and micro level data analysis. The
author suggested a default risk provision to monitor and control the non-pdoming
assets, which is a major cost for reducing profitability. The researcher has also
suggested measures to improve the recovery performance and debt securitization.
JuJhrv, Narendrr and Ajit (1996t2, analysed "The role of banks in cconomic
development of India" during the last five decades. it was observed that despite the
overall progress made by banking system in terms of functional and geographical
coverage, doubts arise about the viability of the banking system in the coming period.
Though financial sector reforms have enabled banks in India to clear their balance
sheets and improve their hctionini,yet they face challenges especially in providing
financial services like leasing, merchant banking, mutual funds, money market and
government securities.
Mpai Smroop (199@, in his book htitlcd "Banking Laws and Practices'' has
described the Reserve Bank of India Act, 1934, Banking Regulation Act, 1949 and the
powers of Reserve Bank of India and the Government of lnd~ato regulate and control
the activities of banks. The author described various legal aspects relating to day-to-
day banking operations, the essential features of a contract, different kinds of
contracts, banker-customer relationship, garnishee order and banks rights under lien
and set-off, legal provisions relating to indemnities and bank guarantees, letters and
credit and bill finance different kinds of securities, their valuation, mode of creation
and laws relating there to and different types of borrowers and credit facilities along
with their governing legal provisions.
Shivpuje, C.R. and Kaverl V.S. (199713",their study was basically confined to
identifying the factors influencing NPAs and suggesting measures that would prevent
the growth of NPAs and affect their speedy recovery. The emphasis was laid on
internal factors over which banks end financial institutions have direct control. They
concluded that NPA problems could be solved if proper care of internal factors is
taken. In other words, recovery of NPAs is possible if efforts of the banks and
financial institutions are strengthened. They observed that though the branoh
managers were quite clear about the RBI guidelines on the classification of advances,
they varied the actual classification of advances made by them based on their persod
experience with different borrowers. This trend, in particular, was observed in trading
accounts with persistent irregularity in cash credit account for a long time.
Khubnandui, B.S. (199qn,in his bobk on "Practice and Law of Banking", has
described the essential banking case law that has grown in the past five decades. In a
competitive environment, a bank needs enhanced use of technology to be customer
oriented, efficient and competitive. In order to change a large net work of branches,
extensive use of technology in product design and delivery, accounting, infom~ation
management and communication is essential. It is therefore necessary for banks to
introduce and absorb information and communications technology extensively at a
rapid speed, not only to remain customer friendly and efficient for existing service
and business but also for managing newer forms of business and services in an
increasingly globalized environment.
Bhattneharyya, A., Lovell, C.A.K and Snhay, P. (1997)39,in their article on '"The
impact of liberalization on the productive efficiency of Indian commercial banks",
have examined the impact of partial liberalization during mid-eightiea on the
productive efficiency of different categories of banks using data envelopment
analysis. Thkr study covered 70 commercial banks which were operating during the
period 1986-91. It has been obsefvd that public sector banks had the highest
efficiency followed by foreign banks. The private banks have been noticed to be the
least dlicient. Also, they 'round temporal improvement in the perfinmance of foreign
44
banks, virtually no trend in the' performance of private sector banks; and a temporal
decline in the performance of the public sector banks.
Vanhney P.N. and MittaP, D.K. '(1999)'0, in their book on "Indian Financial
System', said that emidst the second generation reforms, financial sector continues to
be at the centre stage of path breaking policy changes, with the overall objective of
attaining strengths, soundness and intedational standards. Financial sector reforms
also owe their origin to the brisk pace of liberalization and globalization of the Indian
economy. The spate of changes in the financial sector has also added brther
dimension to the existing literature on banking and finance.
Taori, K.J. (1999)", in his study on "NPA management in SBI-Some issues", has
observed that the performing assets turning NPA has offset the gross reduction in
NPAs of SBI through recoveries, upgradation and write-off. It is further observed that
increase in NPAs mostly relates to the accounts of large industrial and business
enterprises. NPAs in priority sector, both as percentage to advances and share in total
NPAs, are declining.
Ballabh, J. (2001ya, in his study on "The lndian banking industry: challenges ahead",
has analysed challenges in the post banking sector reforms. With globalization and
changes in technology, financial markets world over, have become closely integrated,
For the survival of the banks, they should adopt new policies / strategies according to
the changing environment.
Rama Chandran, A. (2002f9, in his paper entitled "Profits, Profitability and Growth
of Commercial Banks", has analysed some aspects of factors influencing total
earning, total expenditure and profitability of Indian Scheduled Commercial banks.
The multivariate analysis of the profitability undertaken discloses the relationship
among the earning factors and expenses factor on the profitability of banks which
enriches the scope of the study. This study is especially used for policy makers,
bankers and researchers, as it provides adequate information about the determinants of
bank earnings and profits.
Jindal, K.K. (2002)", in his book entitled "Banking and Financial Institutions", has
explained the important topics that include Indian Banking, banks and customcr
relationship, legal aspects of banking; types of accounts including non-resident
accounts as recent topics such as Asset Liability Management (ALM), risk
management, internet banking, non-fund business and universal banking. Banking, by
nature, is a risky business-accepting deposits for short-term and lending it for long
term. In addition, after the deregulation of interest rates, rate risk is also involved.
This is one of the reasons why the banking industry is closely regulated throughout
the world. Assets liability management is one way of managing the risk.
Srinhtua Subba Rio, P. (2003)~',in his paper entitled "Is securitization ordinance
minimizing NPAs or is improving the profits of PSBs by reducing NPAs?" has stated
that the NPAs could not be reduc;dthrough courts, B o d for Musttial and Financial
ReconstrJcton (BIFR) and Govt. cstablishcd Debt Recovery Tribunals (DRTs). In
47
this situation the Govt. o f . India issued the ordinance Securitization and
Reconstruction of Financial ~ s s i sand Enforcement of Security Interest Act
(SARFAESI) bill, 2002. This ordinance has removed the main shortcomings of DRTs
and Vested enormous powers in the banks/Fls. The debt recovery tribunals
established under the 'recovery of debts' Act, 1993 was for the speedy recovery of
NPAs a h v e Rs.10 l a b of banks and financial institutions. The performance of these
tribunals in the recovery of the debts has not been satisfactory.
Rarneswad(2003)~~,
found that themonetary tools were the important parameters of
the banlung financial performance. But they had low or moderate correlation with
other variables viz., bank credit, investments, liabilities, assets, other economic, social
and political factors also influence the growth of these variables.
Kotbai, K. ( 2 0 0 3 ) ~in~his paper entitled "Banking industry, current trends and future
prospects", has analysed all the bank &ups. Public sector banks have recorded
considerable achievement in terms of branch expansion, deposit mobilization and
deployment of credit; and regarding non-performing assets the performance of the
public sector banks is good. The NPAs of this group have been showing decreasing
trend during the study period. The study reveals' that the reduction of NPAs is mainly
due to write-off of bad debts and expansion of total advances over the year.
Cheema, C.S. and Monika Agamal (2003)", in their article entitled "Banking
sector reforms: An appraisal", it is found in this paper that although there was m e
improvement in some variables after the implementation of first phase of reforms but
the overall performance of banks has not improved much. The public sector banks
showed better performance after liberalization in the case of total deposits, total
advances, and deposits per employee only. The private sector benlrs showed better
performance after liMiz8tion in thi? case of total deposits, total advances, deposits
per employee, advances per employee and non-intenst income 8s percentage b total
income.
49
Ram Moban, T.T. and Ray, S.C. (2004)'~, in their article on "Comparing
performance of public and private sector banks: A revenue maximization efficiency
approach", has made a comparison oftechnical, allocative and revenue maximization
efficiency among public, private and foreign banks. A balanced panel data set for 58
banks has been utilized for computing DEA based efficiency scores. Their study
covered the period of 1992-2000. It has been noted that PSBs performed significantly
I
better than private sector banks but not differently from foreign banks on the revenue
maximization measures. Further, the superior performance of PSBs is to be ascribed
to higher technical efficiency rather ihan higher allocative efficiency. It has also been
noted that the State Bank of India turned out to be efficient on all counts.
Vasudev Achary (2005)~', in his article entitled "Growth of banking sector in Andhra
Pradesh", emphasized that the banking industry is striving hard to achieve not only
economic objectives, but also fulfill social responsibilities. For preparing this paper
the bank wise and area-wise data have been collected on selected variables like,
number of offices, deposits and credit pertaining to Andhra Pradesh to compare the
performance of these various types of banks in terms of their branches, deposits and
credit for the year of 2004. To measure the growth in the banking sector, AGR have
been computed for the period of 1954-2004, percentages, ratios are calculated for
different purposes. It is concluded that interventionist policies surely promote the
growth and development of an economy. Banking sector is in no way an exception in
expecting states encouragement in achieving itsgoals.
Rama Sastri, A.S. and Jaya Ramm, A.R. (2005)", in their paper entitled "Is there
excess capacity in Indian banking? An empirical study during the post reforms
period", analysed the banking sector reforms and say that reforms have given rise .to
increase in the number of banks and the bank branches in the lndian banking sector.
Due to increased competition and technological innovations, banks have started
offering various facilities like intemet banking to customers.
Narasimham, M. ( ~ o o s )in
~ ~his
, inaugural address at the seminar on "Banking sector
reforms-looking ahead organized by Indian institute of economics, Hyderabad", has
said that over the last decade and a half, since the initiation of reforms, much progress
has been achieved. Efficiency, performance and transparency have certainly
improved.
Meena Shrrma (ZOOS)*, in ha paper she made an attempt to study the problem of
Non-performing Assets OJPAs) of Indian public sector banks and also its impact on
the performance of these banks. Impact of NPAs on the profitability of the banks is
analysed by applying multiple egression model. Impact of NPAs on the productivity,
achievement of capital adequacy level, funds mobilization and deployment policy of
the banks is also analysed. NPAs not'pnly affected the performance of the banks but
also caused irreparable damage to the entire economy. It endangers the very
foundation of the credit system. Concerted efforts are required at RBI, banks and
judiciary. levels to control the menace of NPAs. Efficient legal framework,
J
improvement in credit appraisal and monitoring skills of banks and strong political
will could enable the Indian banks to find satisfactory solution to the problem.
Kumar, Pawan (2005)~', in his paper "Indian banking to day: impact of reforms",
has examined the performance of new private sector banks. He concluded that private
sector banks are working with efficiency and earning more than what is being earned
by PSBs. Therefore, PSBs should make efforts to control their wage expenses and
other expenses to improve profitability and they should expand their business in rural
area.
Gopalakrishnan, T.V. (2005)*, in his research study, has pointed out that the main
causes of NPA are willful defaults, diversion of funds, deficiency in the credit
appraisal standards and lack of follow up and supervision. Lack of market intelligence
system, want of adequate staff to supervise the credit portfolio and absence of
exchange of credit information among banks are the other major causes of NPAs as
per the survey results. The survey favours containment of NPA by intensifjwg
monitoring and follow up of standard advances to avoid slippage to sub-standard
categories.
Das Abhirmn., Ashok Nag and Subhash, C, Ray (2005)", in their article entitled
"Liberalization, Ownership and Efficiency in lndian Banking: A Non-parametric
Analysis", have examined the outputsriented technical efficiency, cost efficiency,
revenue maximizing efficiency and profit efficiency of Indian (public, private and
foreign) banks for the period from1997 to 2003.They considered four output
parameters for their study-bornwed funds (deposits and other borrowings), mb
aof
employees, fixed assets and equity. They included in their study only those banks
which had at least three branches, duiing the entire study period. Tbe rasult obtained
show that the Indian banks are still not showing much difference in tams of input or
'output oriented technical efficienlcy or cost efficiency. However, they differ sharply in
resped of revenue and profit efficiencies.
Mohrn Reddy, P. and Sivarami Reddy, C. (2006)", in their article "Banking sector
reforms: A perspective", have studied banking sector reforms process in India
initiated in the early 1990s. Many countries adopted a series of financial sector
liberalization measures in the late 1980s and early 1990s that included interest rate
liberalization, entry deregulations, reduction of reserve requirements and removal of
credit allocation. This is because of sound financial systems serve as an important
channel for achieving economic growth through the mobilization of financial savings
putting them to productive use and transforming various risks.
Uppal, RK and Kaur, R (2m7', analysed the efficiency of all the bank
have
p u p s in the post banking sector reforms era. Time period of study is relatad to
54
second post banking sector r e f o m (1999-2000 to 2004-05). This paper concludes
that the efficiency of all the bank groups has increased in the second post banking
sector reforms period but these banking sector reforms are more beneficial for new
private sector banks and foreign banks. This paper also suggests some measures for
the improvement of efficiency of Indian natjonalized banks. The study in Indian
banking industry which comprises five different ownership groups and the ratio
method is used to calculate the efficiency of different bank p u p s . New private sector
banks are competing with foreign banks for continuous improvement in their
performance.
Iiarpreet Kohll and Chawla, AS. i2007)"0, in their paper entitled "Profitability
trends in commercial banks: A study of select commercial banks", compared the
profitability performance of Cfferent banks d&ng the study period and found that
most of the indicators that have shown the performance of the two private sactor
banks viz., ICICI Bank and Bank of Punjab have been better than the two public
sector banks viz., SBI group and Purjab National Bank. It is concluded that the entry
of private sector banks has undoubtedly contributed to the strengthening of the Indian
Banking system by creating a competitive atmosphere. Enhancing efficiency and
performance of public sector banks (2008) is a key objective of economic reforms in
many countries including India. It is believed that private ownership helps improve
efficiency and performance of banks. The study examined the impact of privatization
on bank performance and eficiency using data of banks in India for the five year
period 1998-2002. No significant performance or efficiency difference was seen in
these two associate banks. However, they continued to show improved performance
and efficiency in the year afier privatization.
SaZlir Ahmed Ansari and Nisar Ahmad Khan (2007)", in their article entitled
"Banking sector reforms: Achievements and future challenges", have studied the
prevalence of high reserve requirements, intercst rate controls and the allocation of
financial resources to priority sectors and found that they increased the degree of
financial repression. The banks must be financially strong face the risk to distribute
among creditors and more to lose for shareholders if the bank fails. The study
concentrates more on the second half of the post reform period from 1997 to 2005.
The participation of banks in nual areas during the pre and post reform periods has
especially been examined so as to measure the impact of reforms on rural banking.
Ketkar, K.W. and Ketkar, S.L. (2008)~'~in iheir paper entitled "Performance and
profitability of Indian Banks in the post libbalization period, examined the impact of
reforms and liberalization on efficiency and profitability of 62 Indian commercial
banks. The analysis is confined to the period spanning from 1997 to 2004. A non
parametric data envelopment analysis approach has been employed to estimate the
efficiency scores for individual banks under the two input-output specifications. It has
been observed that the efficiency scores of all banks in general have improved
regardless of their ownership during the period of reforms under both specifications.
Further, the nationalized banks have registered the strongest gains. These gains in
efficiency have shown an improvement in bank profitability.
Karampal and Puja Goyal, M.S. (2008)", in their article entitled "Productivity
performance of banking industry in India: An inter-sectoral analysis", have analysad
the cross relationship among various components of productivity like earning per
employee, business p employee and profit per employee for public, private and
foreign sector banks within Indian banking industry using data for five years starting
from 2001-02 and ending with 2005-06. Various statistical tools like averages,
ACGR, correlation, regression and parametric tests have been used to establish,
evaluate and quantify the cross sectional relationship among the variables. Ownership
characteristics of banks are also incorporated into the analysis to examine productivity
across ownership groups. The suggestions made in this paper may be useful to the
policymaker as it shows the relation between earning per employee and their
productivity is not very significant. Therefore, they may have to search out for other
factors that contribute to higher productivity.
Irfan Ahmed (2008)~,in his article entitled "Banking sector ~.eformsin India since
Liberalization", has discussed the rationale of banking sector reforms in India, capital
adequacy ratio, SLR, CRR and challenges! facing lndian Banking. He concluded that
the banking sector reforms have produced favourable effects on the performance of
commercial banks in general. The global environment is continually changing and
creating new directions, dimensions and immense opportunities for the banking
industry.
Uppal, RK. (2011)~', in his study entitled "Banking sector reforms: policy
implications and fi-esh outlook", has found that the present paper reviews the banking
sector reforms policy, crucial issues and agenda for the future.On the basis of certain
parameters, like productivity, profitability and NPAs management, the paper
concludes that foreign banks and new private sector banks are much better in
performance as compared to our nationalized banks in the post-banking sector
reforms period. The paper ends with the b r e agenda for the Indian banking
industry, particularly for public sector banks to make them efftcient and strong, to
compete with the global banks.
Jappanjyot Kaur Kalra and Singla, S.K. (2011)~, in their article entitled
"Comparison of non-performing assets of selected public sector banks", have studied
the loan follow up procedure and causes and suggestions of NPAs of Punjab and Sind
Bank and Central Bank of India, in Ludhiana. The major causes for the occun:cnce of
NPAs were lack of proper planning, wrong selection of the customer by the banks and
the recessionary trend. This paper compares the non performing assets of selected
public sector banks. This paper concluded that by developing proper management
information system and improving the coordination between the banks and providing
the list of the defaults, the NPAs level can be reduced to a great extent by the banks.
Ashok Wursnr and Kanika Goyal (201 I ) ~ in, their article entitled "Performance
of public sector banks: an analysis", have emphasized that the Indian banking system
has been exposed to increased competition with the enhanced presence of foreign
banks and entry of new private sector banks. Since public sector banks form major
part of total banking system in India, 'there is a need to evaluate the perfomance of
these banks. Profitability and performance are common measwes of auccess of
commercial undertakings. 'l;he whole . W y is analytical in nature and it is based on
61
the secondary data retrieved from report on trend and progress of banking in India,
report on ccurrncy and finance and the like. The scope of the study is limited b
analysis of the performance, risk and &urn of the public sector banks (state bank and
its associates, and nationalized banks) and all commercial banks (SBI and its
associates, nationalized banks, private sector baplcs, and foreign banks) for the period
b m 2001-02 to 2006-07. It examines the productivity and efficiency of public sactor
banks vs commercial banks, trend of operating costitotal cost, cost to income,
labourlnon-labour cost, net interest income, non performing assets and capital to risk
weighted assets ratio and the like. The study observed that there is a need for
increased absorption of enhanced technological ~apabilityby several banks to further
argument yield of the banking sector.
ArtiGaur and Sunita Sukhija (2011)", in their article entitled "A study of financial
performance of selected private banks in India", have emphasized that the banking
sector is the most dominant sector of the financial system in India, and with good
valuations and increasing profits, the sector has been among the top performers in the
markets. Undoubtedly, being tech-sawy and full of expertise, private banks have
played a major role in the development of Indian banking industry. In the process they
have jolted public sector banks out of complacency and forced them to become more
competitive. At present, private banks in India include leading balks like IClCI Bank,
MG Vysya Bank, Kotak Mahindra Bank, SBI commercial and international banks
and the like. Private Banks such as HDFC Bank and ICICI Bank are posting a rapid
increase in their asset base every year as compared to public sector banks. The
analysis reveals that HDFC is the most efficient bank in t m s of generating earning
per share. Kotak Mahindra Bank has higher private bank ratio.
Anuparn Jain, Vlnita Jaln and Swati Jain (2012)'~', in their paper entitled "Non
Performing Assets in India", have explained the concept of NPA and NPAs in Indian
commercial banks. They made an attempt to look at the determinants of NPA by
examining some of the external and internal factors like, the extent of competition,
total assets of a bank, size of operations, proportion of rural branches, investments and
the like can influence NPA. It is in .our interest to examine, among various bank
p u p s (viz., SBI, Nationalized Banks, Private Banks and Foreign Banks), which i$
the most efficient group the recovery of loans and what are the factors that
detemine this efficiency. The) have taken up a field survey based exercise
concerning the SSI sector to understand the actual workings of the loan recovery
process and the associated problems. io particular, we are intemted in examining the
factors that have influenced recovery of loans in this segment of the Indian economy.
The issue of NPAs in the Indian banking sector i s discussed in general with trends of
NPAs. They analysed the NPA data of cqmmercial banks in a panel h e work to
identify the determinants of NPA. This is done for the total advances and also for
advances to the SSI sector.
The scheduled commercial banks including public sector banks, private sector
banks, foreign banks in India and Regional Rural Banks (RRBs) have been working in
the Indian economic system since long. The banking system in India is so strong,
vigilant, vibrant and dynamic than elsewhere in the world. When we come to the
performance of scheduled commercial banks it is understood from the available
statistics that the performance of all scheduled commercial banks on an average is
good. When we come to specific banking sector it is understood from the studies
undertaken by the various researchers that the performance of public sector banks is
significant than the performance of private sector banks and foreign banks in terms of
deposit mobilization, branch expansion, credit lending and the like. In the sense that
the performance of public sector banks is so consistent over the entire study period
than private sector banks and foreign banks.
OBJECTIVES
RESEARCH METHODOLOGY
Sources of Data
The present study is diagnostic and exploratory in nature and makes use of
secondary data. The secondary data have been collected h m books, journals,
magazines, periodicals, handouts, annual reports of the Andhra Bank and the IClCI
Bank, special issues of Indian Banks Association, RBI publications like repon on
trend and progress of banking in India, statistical tables relating to banks, various
reports, the Indian Journal of Commerce, IIB journals, Banking Finance, Dailies like
Financial Express, The Economic Times, B i n e s s Standard, Business Line, The
Hindu and the like.
Sample Design
The universe of the present study consists of public sector banks (26), private
sector banks (21), foreign banks in India (33) and Regional Rural Banks (82). The
Regional Rural Banks and foreign banks are excluded from the scope of the present
study. The public sector and private sector banks are considered for the present shdy.
Therefore, the researcher has picked up one out of 26 fiom public sector banks and
one out of 21 &om private sector banks as per his convenience. This sample falls
under the convenience sampling technique.
PERIOD OF THE STUDY
The select time period for the present study is one decade starting from 2001 -
02 to 2010-11. Financial statements for the said period relating to all scheduled
commercial banks are procured from the RBI website and the financial statements
relating to Andhra Bank and ICICl Bank are procured from the websites of Andhra
Bank and ICICI
Bank.
TOOLS OF ANALYSIS
Data collected from the various sources have been analyse. with the help of
appropriate simple mathematical and statistical tools. Some important tools that ate
deployed for the present study are ratios, percentages, growth rates, mean, standard
deviation, co-efficient of variation, Linear Growth Rate (LGR), Compound Growth
Rate (CGR), '1' value and the like.
The scope of the present study is confined to specific pcriod of time i.e., fiom
2001-02 to 2010-1 1 and two commercial banks, namely viz., Andhra Bank and ICICI
Bank. Therefore, inferences drawn for the present study may not be extended to the
other banks of the other parts of the country and may not be extended to other time
periods. Because of time and money 'constraints, the researcher has confined his study
to only two banks, one from public sector banks and the other from private sector
banks.
CHAPTER SCHEME
The entire theme a f the study is divided into eight chapters. The plan of the
study is as follows.
Chapter-111: The profile of the study units vii., Andhra Bank and lCIC1 Bank, is
presented in this chapter.
CONCLUSION
This chapter concludes that the researcher has reviewed a sizable number of
studies. The statement of the problem reveals that the banking system in India is
strong, vigilant, vibrant and dynamic than else where in India. The need for the study
justifies that the studies of this nature are very much needed for alerting the banken, to
correct the distortions or weakness that may have crept in over a period of time. The
objectives that are set for the present study are relevant and appropriate. Resonable
sample design was adopted The period of the study is optimum. Tools used for the
analysis of data are relevant. The scope and limitations are justifiable and the chapter
scheme is sequential.
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