Presentation By: Shruti Sekhsaria Garvit Patel Mayank Lunia Deepak Rahul Kansal

An Asset, Including A Leased Asset, Becomes Non Performing When It Ceases To Generate Income For The Bank. A Non-performing Asset (NPA) Is A Loan Or An Advance Where; A) Interest And/Or Instalment Of Principal Remain Overdue For A Period Of More Than 90 Days In Respect Of A Term Loan, B) The Account Remains Out Of Order As Indicated At Paragraph 2 Below, In Respect Of An Overdraft/Cash Credit (OD/CC), C) The Bill Remains Overdue For A Period Of More Than 90 Days In The Case Of Bills Purchased And Discounted, D) The Instalment Of Principal Or Interest Thereon Remains Overdue For Two Crop Seasons For Short Duration Crops, E) The Instalment Of Principal Or Interest Thereon Remains Overdue For One Crop Season For Long Duration Crops, An Account Is Classified As NPA Only If The Interest Due And Charged During Any Quarter Is Not Serviced Fully Within 90 Days From The End Of The Quarter.

Banks should classify their assets into the following broad groups, viz. (i) Standard Assets (ii) Sub-standard Assets (iii) Doubtful Assets (iv) Loss Assets

Restructuring of advances could take place in the following stages : (a) Before commencement of commercial production / operation; (b) After commencement of commercial production / operation but before the asset has been classified as 'sub-standard'; (c) After commencement of commercial production / operation and the asset has been classified as 'sub-standard' or 'doubtful'.

Return on capital employed should be at least equivalent to 5 year Government security yield plus 2 per cent. The debt service coverage ratio should be greater than 1.25 within the 5 years period in which the unit should become viable and on year to year basis the ratio should be above 1. The normal debt service coverage ratio for 10 years repayment period should be around 1.33. The benchmark gap between internal rate of return and cost of capital should be at least 1per cent. Operating and cash break even points should be worked out and they should be comparable with the industry norms. Trends of the company based on historical data and future projections should be comparable with the industry. Thus behaviour of past and future EBIDTA should be studied and compared with industry average.

BANKS

GROSS NPA

GROSS ADVANCES

GROSS NPA TO GROSS ADVANCES RATIO % 5.42 4.80 4.75 4.82 4.02

UCO Bank Central Bank of India State Bank of India Dhanalakshmi Bank Indian Overseas Bank Lowest NPA YES BANK

71301 84562 511894 3803 66080

1315691 1762337 10785571 78963 1643665

943

470869

0.20

UCO BANK: ITEMS Net NPAs to Net Advances (%) Movement of NPAs (Gross): Gross NPAs as on 1st April

2012-13 (In Cr) 3.17

2011-12 (In Cr) 1.96

4086.20

3150.36

(Fresh NPAs) Plus Exchange Differences

Sub-total Less: Upgradations

5161.59
9247.79 (672.54)

2401.16
5551.52 (416.66)

Recoveries (excluding recoveries made from upgraded accounts)

Write-Offs

(827.93)

(658.11)

(617.23)

(390.55)

Sub-total
Gross NPAs as on 31st March Movement of Net NPAs:

2117.70
7130.09

1465.32
4086.20

Opening balance

2263.94

1824.55

The gross NPA as on 31.03.2013 of the bank has Increased to rs.7130 crore from rs.4086 crore as on 31.03.2012 And this is mainly due to the slippage of a large number of borrowal Accounts to NPA in the FY 2012-13, particularly some high value Group accounts. This sudden slippage is mainly due to the effect Of global recession which affected domestic economic activity Also to a large extent; and large projects could not either be Completed or generate sufficient cash flow as anticipated, hence Failed to fulfil their repayment obligations to the bank. Similarly, SME accounts also got affected badly. The sudden slippage has Resulted in increase in GNPA/NNPA ratios in the FY 2012-13 as Compared to the FY 2011-12.

DHANLAXMI BANK: ITEM S (i) Net NPAs to Net Advances (%) (ii) Movement of NPAs (Gross) (a) Opening balance (b) Additions during the year (c) Reductions during the year (d) Closing balance (iii) Movement of Net NP

2012-13 (In Lakhs) 2011-12(In Lakhs) 3.36 10,427 50,478 22,878 38,027 0.66 6,709 9,182 5,464 10,427

(a) Opening balance

(b) Additions during the year (c) Reductions during the year (d) ECGC Collection (e) Floating Provision (f) Closing balance (iv) Movement of provisions for NPAs (a) Opening balance (b) Provisions made during the year (c) Write-off of excess provisions

5,800
42,673 20,085 2,286 26,102 4,603 10,030 2,732

2,747
7,028 3,826 28 177 5,800 3,910 2,331 1,638

The Indian Economy Faced Continued Slow Down In The Activities At The Back Of Rising Interest Rate Regime And Recessionary Scenario Globally During The Year Ended 31st March 2013. The Economic Condition Affected The Borrowers Of Your Bank Also, Particularly Those In The Industrial And Infrastructure Sector. During The Year, Accounts Having Balance Of `504.78 Crores Turned Into NPA Which Was Abnormally High Compared To Previous Years Slippage Of `87.76 Crores. However, Through Concerted Efforts, The Bank Could Recover `227.71 Crores (`52.97 Crores For The Corresponding Previous Year). The Bank Could Successfully Utilize All Recovery Measures Open To It Under Law Including The Provisions Of Securitization And Reconstruction Of Financial Asset And Enforcement Of Security Interest Act For Achieving This Record Performance. Further The Bank Better Re-empowered Its Branches For Quality Credit Dispensations And Management Aiming To Bring Down The NPA And Build Up Healthy Advance Portfolio.

Blames large borrowers for the increasing non-performing assets (NPAs) of public sector banks (PSBs) Asks lenders to monitor 30 big bad debt accounts each Asks banks to set up a division each to monitor the recoveries from prudentially written-off accounts.