scholarly journals A Systematic Review on Non-Performing Assets in Banks in India

2021 ◽  
Vol 12 (2) ◽  
pp. 177-184
Author(s):  
Aniket Pundir , Et. al.
Keyword(s):  
Systematic Review ◽  
Public Sector ◽  
Financial Institutions ◽  
Financial Institution ◽  
Financial Sector ◽  
Revenue Generation ◽  
Public Sector Banks ◽  
Day By Day

Lending is a cruttial part of financial sector that is Banks/NBFCs in India. It is main revenue génération business of Bank/NBFCs. Financial Institution i.e. Bank and NBFCs used to borrow funds from the market i.e. from other institution & public and then lend the same again to its clients to gain profits to its owners/investors. There were 27 Public Sector Banks in India (Incl. SBI Associates Banks) before announcement of merger of some Banks by Union Govt. Of India in the year 2019 and there are multiple other Pvt. Sector Banks and NBFCs, co-operative bank and regional rurul bank which we studied in this paper. Lending business of the Banks/NBFCs is facing slowdown in recent years. Non-Performing Assets are increasing day by day which is creating big problem not only to financial sector i.e. Bank/NBFCs but also for other industries. In this paper we will systemtically review the literature/artiles already pubilshed on NPAs in India and to know the main reasons and factor which are resposible for rising NPA in financial institutions and to find out scope of further research on this topic.

Exploratory Factor Analysis for the Identification of Dimensions Which Cause Non-Performing Assets in Non-Banking Financial Institutions

GIS Business ◽  
2017 ◽  
Vol 12 (5) ◽  
pp. 60-74
Author(s):  
K. S. Rajeev ◽  
Suresh Subramoniam
Keyword(s):  
Factor Analysis ◽  
Public Sector ◽  
Exploratory Factor Analysis ◽  
Financial Institutions ◽  
Evaluation System ◽  
Financial Institution ◽  
Capital Adequacy ◽  
High Interest Rate ◽  
Public Sector Banks ◽  
High Interest

According to Reserve Bank of India (RBI) Governor, public sector banks are having stressed accounts equivalent to over Rs.7 lakh Crores including non-performing assets (NPA) and restructured loans (News Asia, 2016). RBI has also pointed out that gross NPA of public sector banks has risen to 6.03% during June 2015 from 5.20% during March 2015. As banks have growing huge bad debts, steps are being laid down by the RBI and the government to help lending banks clean up their balance sheet by 2017. NPAs impact bank growth or stability and deteriorate profits, increase provisions, reduce reserves, affect capital adequacy, increase market borrowings, drop share values, build negative image about the economy and high interest rates. In order to compensate for the money lost in the form of interest in NPAs, banks have to charge high interest rate from other borrowers. This will have indirect impact on inflation and results in negative impact on development. Overall development of the country will also get affected due to NPA by way of unemployment, business exit due to inability to meet its loan repayment obligations, instability of the banking system, and liquidity crisis. A detailed analysis on the factors which cause NPA has become a high priority research agenda in the present day context. A questionnaire is developed for the purpose to acquire and analyse data to identify factors which cause NPA. Also, an exploratory factor analysis has been carried out to identify factors which contribute to growing NPA in financial institutions. Purpose: The purpose of this paper is to identify factors which cause non-performing assets in non-banking financial institutions. Design or methodology or approach: A questionnaire has been developed to gather data from 120 professionals who are involved in the process of granting or recovering loans in non-banking financial institutions in India and appropriate statistical techniques have been used to test for statistical significance. Findings: As a result of exploratory factor analysis, three components with corresponding factors are identified for the cause of non-performing assets in non-banking financial institutions. These are component 1 which is professional incapability of the borrower in running the firm leading to NPA, component 2 related to borrower nature in wilful default and his or her influential nature on financial institution and government resulting in NPA and, component 3 due to weak internal policy of the firm or external environment which aid non-repayment of loan. Component 1, component 2, and component 3 have nine factors, seven factors, and six factors associated with them, respectively, as explained in the paper. Research limitations or implications: The study identified the factors which are to be critically analysed prior to granting loan so that chance of the loan becoming NPA can be minimised. The success of this finding depends on suitably designed electronic credit worthiness evaluation system that evaluate the borrower. Originality or value: The identification of various factors which contribute to non-performing assets and to take suitable measures to control them is a high priority agenda for any financial institution and this research is directly oriented towards that direction.

scholarly journals Alliance of Financial Institution and Government in Sustainable Development: The Case of Poland

2018 ◽  
Author(s):  
Agnieszka Alinska ◽  
Beata Zofia Filipiak ◽  
Aneta Kosztowniak
Keyword(s):  
Economic Growth ◽  
Sustainable Development ◽  
Public Sector ◽  
Natural Resources ◽  
Financial Institutions ◽  
Financial Institution ◽  
Financial Sector ◽  
Public Authorities ◽  
The Government

The striving for sustainable development has become the goal of actions undertaken not only by representatives of public authorities and institutions representing this sector, but also representatives of private entities who are increasingly recognizing the benefits and sources of long-term development based on the principles and objectives of sustainable development. These are mainly based on the pursuit of synergy in the three basic areas of activities, i.e., in the economic, social, and environmental dimensions as well as in the maintenance of natural resources. The implementation of these activities is connected with the necessity of incurring financial expenditures, which the government (public sector) does not have in the required value. Therefore, in the process of sustainable development for which the government is responsible, the active participation of the financial sector (banks) is necessary. Achieving results within the alliance of the concept of sustainable development requires the setting of a kind of contract, the parties of which are the government, society, and financial institutions. The purpose of the conducted research is to indicate by which means the government and the financial sector can stimulate economic growth towards its sustainable development.

Corporate governance and the social performance: investigation on Tunisian financial institutions

2018 ◽  
Vol 60 (6) ◽  
pp. 1412-1431
Author(s):  
Nejia Nekaa ◽  
Sami Boudabbous
Keyword(s):  
Corporate Governance ◽  
Financial Institutions ◽  
Financial Institution ◽  
Stock Exchange ◽  
Social Performance ◽  
Financial Sector ◽  
Content Type ◽  
The Social ◽  
Questionnaire Method ◽  
The Impact

Purpose The purpose of this study is to show the specificities of the corporate governance of Tunisian financial institutions and the impact of the internal mechanisms of corporate governance of these institutions on their social performance. It is therefore interesting to establish the existing relationship between these mechanisms of corporate governance and the performance of a financial firm. Design/methodology/approach This study aims to study the financial sector, generally characterized by its opacity, its regulation, its evolution and its obscurity. Therefore, a study based on the questionnaire method was recommended. The questionnaire is intended for managers. Therefore, the authors interviewed 138 managers of Tunisian financial institutions dispersed between agencies and headquarters in different regions (Gabes, Tozeur, Gafsa, Sfax, Sousse and Tunisia). Findings As a result, an impact on performance was observed according to the empirical study. Therefore, the authors can conclude an essential role of internal mechanisms for improving the social performance of a financial institution. The empirical findings in this paper lead to important conclusions. Indeed, the variables measuring the governance mechanisms have divergent effects on the social performance of the financial institutions subject to the sample. For the variables board of directors, confidence, culture, auditing, they have a positive effect. While, the incentive remuneration effect negatively the social performance. Originality/value This study will be based essentially on the financial sector in Tunisia: the credit institutions (22 banks), the establishments of leasing (eight companies of leasing), two factoring companies and two banks of cases which are listed on the Stock Exchange of Tunis (BVMT).

Selected challenges associated with the reliance on customer due diligence measures to curb money laundering in South African banks and related financial institutions

2021 ◽  
Vol 8 (1) ◽  
pp. 42-66
Author(s):  
Howard Chitimira ◽  
Sharon Munedzi
Keyword(s):  
South Africa ◽  
South African ◽  
Money Laundering ◽  
Financial Institutions ◽  
Financial Institution ◽  
Financial Sector ◽  
Due Diligence ◽  
Role Players ◽  
Customer Due Diligence ◽  
Combat Money Laundering

Customer due diligence is a means of ensuring that financial institutions know their customers well through know-your-customer (KYC) tools and related measures. Notably, customer due diligence measures include the identification and verification of customer identity, keeping records of transactions concluded between a customer and the financial institution, ongoing monitoring of customer account activities, reporting unusual and suspicious transactions, and risk assessment programmes. Accordingly, financial institutions should ensure that their customers are risk assessed before concluding any transactions with them. The regulation of money laundering is crucial to the economic growth of many countries, including South Africa. However, there are still numerous challenges affecting the banks and other role players’ reliance on customer due diligence measures to combat money laundering in South Africa. Therefore, a qualitative research methodology is employed in this article to unpack such challenges. The challenges include the failure to meet the identification and verification requirements by some South African citizens, onerous documentation requirements giving rise to other persons being denied access to the formal financial sector, and the lack of express provisions to regulate the informal financial sector in South Africa. Given this background, the article discusses the challenges associated with the regulation and implementation of customer due diligence measures to enhance the combating of money laundering in South African banks and related financial institutions. It is hoped that the recommendations provided in this article will be utilised by the relevant authorities to enhance customer due diligence and effectively combat money laundering activities in South African banks and related financial institutions.

Analysis of Banking Industry by Using Camel Model with Special Emphasis on Selected Indian Public Sector Banks

2016 ◽  
Vol 11 (02) ◽  
Author(s):  
Mamta Shah ◽  
Mahua Dutta
Keyword(s):  
Public Sector ◽  
Banking Sector ◽  
Banking Industry ◽  
Financial Sector ◽  
High Rate ◽  
Public Sector Banks ◽  
The Face ◽  
Growing Economy ◽  
Domestic Inflation ◽  
Model Approach

India is among the fastest growing economy in the world. The growth of any economy is largely depending on its financial sector. One of the components of financial sector is the banking sector. The growth of banking industry plays a major role in the development of that economy. If we go to past we can see that over the couple of years the Indian Banking sector has shown a high rate of buoyancy in the face of high domestic inflation, rupee depreciation, and due to fiscal uncertainty. Even our central bank has adopted various measures to stimulate growth and overall development of the sector. The present paper discuss the analysis of banking industry specially our public sector banks by using CAMEL model approach.

scholarly journals DETERMINANTS OF PRIORITY SECTOR LENDING OF INDIAN PUBLIC SECTOR BANKS: AN ECONOMETRIC ANALYSIS

2017 ◽  
Vol 5 (7) ◽  
pp. 461-473
Author(s):  
Santosh Kumar Panda ◽  
Ganesh Prasad Panda ◽  
Anil Kumar Swain
Keyword(s):  
Developing Countries ◽  
Public Sector ◽  
Financial Institutions ◽  
Small Businesses ◽  
Commercial Banks ◽  
Secondary Data ◽  
The Public ◽  
Public Sector Banks ◽  
Number Of Factors ◽  
Policy Suggestions

Compulsory sanctioning credit or priority sector lending (PSL) is part of the regulatory framework for commercial banks/ financial institutions in many countries, both developing and developed. However, compliance and lending effectiveness of such programs may be determined by a number of factors. This may be particularly so in developing countries, where availability of finance for the vulnerable sectors likes agriculture, small businesses, weaker sections, are scarce. The present paper aims at examining the patterns of priority sector lending by banks, with a view to identifying the factors which determine this lending The paper is based on an analysis of secondary data relating to priority sector lending (2006-07-2015-16) for the Public sector banks in India. The results indicate gaps in patterns of the sect oral target compliance by different bank groups, along with the lending preferences and challenges faced by banks in such lending. It also identifies bank-specific characteristics like the nature of ownership, size, performance, etc., which have a significant impact on the priority sector lending patterns. Based on its findings, the paper offers policy suggestions for improving the effectiveness of priority sector lending program.

scholarly journals A Study of Priority Sector Lending with special reference to Selected Public Sector Banks in Shimoga District

2020 ◽  
Vol 8 (1) ◽  
pp. 51-55
Author(s):  
S Manjushree ◽  
K V Giridhar
Keyword(s):  
Public Sector ◽  
Special Reference ◽  
Financial Institution ◽  
Secondary Data ◽  
Statistical Tool ◽  
Public Sector Banks ◽  
Irrigated Area ◽  
The People ◽  
Efficient Planning ◽  
The Government

A financial institution has a major role to play in the development of any district as they provide financial assistance to the people who take up income-generating activity. The district is predominantly agriculture having 58% land id irrigated area and 42% rain-fed area. Efficient planning facilitates optimal and needs-based use of available resources for meeting the development needs of the region in an equitable and scientific manner. Priority sector lending is a scheme guided by the Government. As per RBI directive, commercial banks advised granting 40% of their total advances to borrowers in the priority sectors. Priority means to give preference and privilege. This paper provides a platform to understand priority sector lending by public sector banks with special reference to shivamogga district. The District credit plan of shivamogga district during the year 2019-2020 provides the information of outlay. An outlay of Rs.3395 crores has been provided for agriculture out a total priority outlay of RS.6262 crores. The study has used both primary and secondary data. The collected data are embodied by using tables, and analysis was done by using percentage analysis and a statistical tool like X2 test is also used.

scholarly journals Partial Ordered Logit Analysis of Confidence Levels in Financial Institutions in Ghana. The Case of Asante Mampong Municipality

2020 ◽  
Vol 12 (7) ◽  
pp. 21
Author(s):  
Isaac Abunyuwah
Keyword(s):  
Financial Institutions ◽  
Financial Institution ◽  
Critical Role ◽  
Financial Sector ◽  
Public Confidence ◽  
Logit Analysis ◽  
Ordered Logit ◽  
Proportional Odds ◽  
Confidence Levels ◽  
Proportional Odds Assumption

In recent times the financial sector (FS) of Ghana has been saddled with liquidity and operational challenges leading to several financial policies put in place by the Central Bank. The financial crisis and its resultant stringent measures affected public confidence as many customers lost their investments/savings while some financial institutions were consolidated or collapsed. Noting the critical role of public confidence in the financial sector, this paper assessed the confidence levels in FS of Ghana, using Asante Mampong Municipality as a case study. A random sample of 384 respondents was used. Due to the ordinal nature of the dependent variable (confidence levels), the Partial Proportional Odds (PPO) model was used when the ordered logit model failed to pass the proportional odds assumption. About 46.4% of the respondents reported having ‘no confidence’ in the financial institutions of the country, while 37% indicated having ‘somehow confident’ in the sector. Less than 20% of the respondents expressed ‘confident’ (13.3%) or ‘very confident’ (3.4%) in the FS. Duration of engagement with a financial institution, loss of investment, awareness of crisis/reforms of the financial sector and income levels affected the confidence levels in the financial sector. Financial institutions are recommended to strengthen their relationship with customers by providing improved services and policy measures that secure customers investment/savings to ensure sustained and increased levels of confidence.

Comparative Analysis of Service Quality Perception Between Public Sector and Private Sector Banks of India

2019 ◽  
pp. 117-138
Author(s):  
Deepika Singh Tomar ◽  
Rohit Singh Tomar
Keyword(s):  
Public Sector ◽  
Service Quality ◽  
Financial Institutions ◽  
Banking Sector ◽  
Research Work ◽  
Retail Banking ◽  
Primary Data ◽  
Public Sector Banks ◽  
Quality Aspects ◽  
Private And Public

The chapter deals with the study of customers' expectations as well as their perceptions for service quality in banking sector. Again, the study focuses on the influence of major demographic variables such as age, income, education, and occupation on customers' expectations and perceptions for service quality. Moreover, this research work has been carried out with the help of primary data collected through a survey of 300 retail banking customers (i.e., 150 ICICI Bank customers and 150 SBI customers of Agra region). In India, retail banking is one of the fastest growing industries. The present study has endeavored to examine the service quality aspects of the two leading banks in Agra region and will also help the other private and public sector banks and financial institutions to have a better understanding of customer needs and the booming opportunities in retail banking in India.

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