scholarly journals A Study of Non Performing Advances and It’s Management With Special Reference to Punjab National Bank

2021 ◽  
pp. 507-512
Author(s):  
Dr. Martha Sharma
Keyword(s):  
Banking Sector ◽  
Negative Impact ◽  
Capital Adequacy ◽  
Reserve Bank ◽  
Capital Adequacy Ratio ◽  
National Bank ◽  
Performance Area ◽  
Definition Of ◽  
Reserve Bank Of India

Banking industry plays an important role in the development of an economy. Banks have become very cautious in extending loans. The reason being mounting non-performing assets (NPAs). NPAs put negative impact on the profitability, capital adequacy ratio and credibility of banks. It is defined as a loan asset, which has ceased to generate any income for a bank whether in the form of interest or principal repayment. As per the prudential norms suggested by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis. In other words, such interests can be booked only when it has been actually received. Therefore, this has become what is called as a ‘critical performance area’ of the banking sector as the level of NPAs affects the profitability of a bank. This paper touches upon the meaning and consequently the definition of a non-Performing asset, the conceptual framework of non-performing assets, classification of loan assets and provisions. The study also evaluates the adverse effect of non-performing assets on the return on total assets of Punjab National Bank Limited for the period 2013 to 2015, 2016-17, and 2019-20. Particularly discussing some remedial measures taken up by the Bank to overcome this situation of NPA.

scholarly journals Performance Analysis of GCC Banks: A Survey

2020 ◽  
Vol 12 (1) ◽  
pp. 357
Author(s):  
Manuel Fernandez ◽  
Luluwa Juma ◽  
Hanan Alkharoossi ◽  
Robinson Joseph
Keyword(s):  
Banking Sector ◽  
Capital Adequacy ◽  
Total Asset ◽  
Return On Equity ◽  
Economic Role ◽  
Gcc Countries ◽  
Capital Adequacy Ratio ◽  
Net Profit ◽  
Income Ratio ◽  
National Bank

The banking sector plays an essential economic role in providing financial intermediation and economic acceleration by converting deposits into productive investments. A strong banking sector can deal with any crisis and contribute abundantly to the stabilization of the economy. GCC is home to one of the fastest increasing banking sectors in the world. The objective of this study is to identify the country that has the best-performing banking sector in the GCC and to rank the best-performing banks in the GCC based on different parameters like the total asset, net profit, return on asset (ROA), return on equity (ROE), capital adequacy ratio and cost-to-income ratio. The study includes all the 55 listed banks from the GCC countries. The study revealed that Emirates NBD from the UAE is at the top rank under Net Profit and ROE, the second rank in ROA, and the third rank in Total Assets. Qatar National Bank from Qatar has been ranked the best under the category Total Assets, rank two under net profit, rank four in ROE, and cost-to-income ratio. The National Commercial Bank from Saudi Arabia was ranked third in ROE and ROA and rank four under Total Asset and Net Profit.

scholarly journals An Impact of Capital Adequacy Ratio on the Profitability of Private Sector Banks in India – A Study

2021 ◽  
Vol 11 (5) ◽  
Author(s):  
Jayesh J Jadhav ◽  
Ashish Kathale ◽  
Shreeya Rajpurohit
Keyword(s):  
Private Sector ◽  
Banking Sector ◽  
Bank Lending ◽  
Study Data ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Reserve Bank ◽  
Capital Adequacy Ratio ◽  
Proportionate Change ◽  
Research Tools

Profitability being one of the cardinal principles of bank lending acts as a game changer for the survival and success of private sector banks in India. In order to stay profitable, banks have to capitalise on every penny advanced to yield the expected returns. However, considering the constraints laid down by the Reserve Bank of India, banks have to maintain a minimum capital adequacy ratio, as per the current BASEL III regulations active in India. With the mergers of public sector banks, the challenge has got just tougher for the private sector banks in India. Expansion and Diversification are the key strategies adopted by the key players from the private banking sector, however, with the minimum capital adequacy ratio observed by them, it is necessary to understand its actual impact on the bank’s profitability. This research paper aims to throw light upon the linkage that capital adequacy has with the bank’s profitability. It attempts to establish a relation between the Capital Adequacy Ratio with the Net profits of the bank. For the purpose of this study, data from the past 5 years of the leading private sector banks has been collected, namely, HDFC Bank, ICICI Bank, Kotak Mahindra Bank, AXIS Bank and YES Bank. The collected data has been analysed using Pearson’s Correlation to establish a relation between the CAR Ratio & the bank’s profitability. Hypothesis testing has been further done to study the quantum of proportionate change in the profitability with a change in the CAR Ratio for private sector banks using applicable research tools. The said research tools are applied to achieve the desired results while maintaining the required quantum of accuracy. It also aims to understand the proportionate impact of changes in CAR to the bank’s profitability, which can act as a suggested measure for banks to develop a reliable framework for efficient capital management and increase overall efficiency. The results derived from the data collected and analyzed aim to pro

scholarly journals NPAs in Indian Scheduled Commercial Banks: Origination and Impact on Economy

2019 ◽  
Vol 8 (2S6) ◽  
pp. 538-541
Keyword(s):  
Banking Sector ◽  
Global Financial Crisis ◽  
Capital Adequacy ◽  
Credit System ◽  
Secondary Sources ◽  
Root Cause ◽  
Reserve Bank ◽  
Capital Adequacy Ratio ◽  
Financial Soundness ◽  
The Government

Mounting non-performing assets (NPAs) in the Indian banking sector has been drawing the attention of policymakers, economists, academicians, and other stakeholders. More particularly, during the last ten years, the rise in NPAs of banks has sent the alarming bell both to the Reserve Bank of India and the Government. Per a few studies, one of the root cause for the huge and gigantic rise in NPAs is the 2008 global financial crisis besides lending to Priority sector. The necessity of provisions and high funding costs has also caused an increase in NPAs while bringing down the profitability of banks. Hence, the consequent impact of NPA includes poor recycling of funds due to the weak deployment of credit which potentially could thwart the financial soundness of the credit system. Higher NPAs not only shakes the confidence of investors, depositors, lenders, etc., but also imperil liquidity, solvency position, profitability, capital adequacy ratio, and so on. A few measures that are required for management of NPAs like the establishment of monitoring department, reformulation of banks’ credit appraisal techniques, among others. The paper examines the trends of NPAs and the factors responsible for mounting NPAs in the banking sector from non-identical aspects. The use of secondary sources of data from authentic websites of RBI, Finance Ministry, and Banks has been made.

scholarly journals The Effect of Capital Adequacy on Returns of Assets of Commercial Banks in Kosovo

2019 ◽  
Vol 8 (2) ◽  
pp. 201
Author(s):  
Halit Shabani ◽  
Fisnik Morina ◽  
Valdrin Misiri
Keyword(s):  
Commercial Banks ◽  
Fixed Effects ◽  
Banking Sector ◽  
Negative Impact ◽  
Positive Impact ◽  
Financial Institution ◽  
Banking System ◽  
Secondary Data ◽  
Capital Adequacy ◽  
Capital Adequacy Ratio

The purpose of this study is to analyze the effects of capital adequacy on the return of assets to the banking sector in Kosovo. The capital adequacy ratio measures the ability of a financial institution to meet its liabilities by comparing its capital with its assets. As the banking system is one of the strongest points of our country's economy, it is understood that the capital adequacy ratio is used by banks to determine the adequacy of their capital holdings while taking their risk exposures into account.This study will provide empirical evidence of the relationship between capital adequacy and return on commercial bank assets in Kosovo during 2008-2017. It will be using secondary data obtained from audited reports of domestic banks and reports from the Central Bank of Kosovo. To measure the empirical results during this research, these econometric methods have been used: the linear regression model, the model of the fixed effects, and the random model and the GMM model. Based on the results we can conclude that capital adequacy has a positive impact on asset returns and has a significant relationship. In addition, other factors have had a positive and negative impact on the return of commercial banks' assets in Kosovo. Keywords: capital adequacy, return on assets, loans, deposits, interest rates.JEL Classification: G21, G31, G32

Basel Capital Adequacy Ratio Standard in The Light of Islamic Law Perspective

2016 ◽  
Vol 1 ◽  
pp. 308-317
Author(s):  
Adi Rahmanur Ibnu
Keyword(s):  
Financial Crises ◽  
Global Economy ◽  
Banking Sector ◽  
Islamic Law ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Capital Adequacy Ratio ◽  
Global Banking ◽  
Banking Development

Bank is one of the most important pillars of economy activities. However, banking sector has a real potential crisis threat. Alongside with the steady current global banking development, financial crises that have happened clearly affected global economy. Based on that situation, BIS (Bank for International Settlement) – an international financial standard setting organization, realizes the urgency to establishan international financial standard and supervision to anticipate future potential financial crises. This research aims to identify how Capital Adequacy Ratio Standard in Basel Capital Accord (II) based on Islamic law perspective. The research is conducted by analyzing Basel Capital Accord published by BIS. The research uses library research method to find out the aimed result. The focus is on the 1st pillar of Basel II publication that is Minimum Capital Requirements (CAR) policy. CAR, as an Islamic economics policy, will be analyzed using falāḥ approach. Falāḥ is an Islamic economics objective that consists of happiness, success, accomplishment or good luck concept. The earthly dimension of falāḥ has some parameters that can be used to analyze Islamic economics policy. Additionally, the Islamic fiqh maxim takes part in analyzing the policy. The maṣlaḥat concept in fiqh maxim approach shares aim with falāḥ concept in the sense that all of sharia law aims for success, happiness, eternal survival etc. The maṣlaḥat can be accomplished by extinguishing mafsadat or seizing maṣlaḥat. The maṣlaḥat aspect is essential to determine the compatibility Basel Capital Accord with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl). The conclusion results are, 1) Basel Capital Accord focuses on macro-prudential aspect in order to anticipate potential financial crises, 2) beneficial/interest (maṣlaḥat) aspects of the hereafter, cooperation principle, justice, fairness and the prohibition of exploitation are not the core value of Basel Capital Accord frame work, thus 3) the achievement of maslahat as intended by sharia i.e. jurisprudential maxim are not convincing. Therefore, 4) Basel Capital Accord as a regulation basis is not in line with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl).

Comparative analysis of Financial performance of HDFC and SBI bank on the basis of Ratio analysis

2021 ◽  
pp. 111-114
Author(s):  
Reetika Verma
Keyword(s):  
Financial Performance ◽  
Banking Sector ◽  
Banking System ◽  
Capital Adequacy ◽  
Ratio Analysis ◽  
Return On Equity ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Equity Ratio ◽  
Accounting Ratios

The banking sector in any economy plays a significant role in its growth and development. This paper is based on financial performance analysis of two leading banks of India. This paper aims to evaluate financial performance of HDFC and SBI bank on the basis of accounting ratios and also to study the functioning of the Indian banking system [6]. In this paper different ratios of both the banks are compared. Capital adequacy ratio, debt equity ratio, leverage ratios, profit and loss account ratios, net interest margin ratio, return on equity and other ratios are used to compare the performance of both the banks. This research is based on the data collected from financial statements of the banks. The performance of both the banks are compared from the year 2015 to 2020. It is observed that performance of HDFC is better than SBI not only in terms of ratio analysis but also in terms of customer satisfaction.

scholarly journals ANALISIS FAKTOR – FAKTOR YANG BERPENGARUH TERHADAP PROFITABILITAS PERBANKAN YANG GO PUBLIC DI BURSA EFEK INDONESIA PADA TAHUN 2012 - 2016

2019 ◽  
Vol 15 (1) ◽  
Author(s):  
Astohar Astohar
Keyword(s):  
Significant Influence ◽  
Banking Sector ◽  
Capital Adequacy ◽  
Main Function ◽  
Going Public ◽  
Operating Income ◽  
Operational Costs ◽  
Net Interest Margin ◽  
Capital Adequacy Ratio ◽  
Interest Margin

Banking plays a role in economic development, namely in spurring economic growth. The main function of the bank is as a financial intermediary from parties who have excess funds with those who lack funds. The existence of the banking sector has an important role, which in the life of the community mostly involves services from the banking sector. Banking profitability is a ratio to determine the financial performance of banks. Research from Ali and Laksono (2017) is still interesting to develop both the variables and the object of research. In this study, the variable capital adequacy ratio (CAR) added with consideration that there were still differences between researchers.This study took the object of banks going public on the Indonesia Stock Exchange. Banks that went public in 2016 were 43 banks. After checking as many as 26 banks that can be taken as samples through purposive random sampling technique. 17 banks that cannot be used as samples include going public in the year after 2012 and the absence of complete data. The analytical tool used is multiple regression equation test with the requirement to meet normal criteria and no classical assumption deviations occur.The results showed that the capital adequacy ratio (CAR), loan to deposit ratio (LDR), operational costs and operating income (BOPO) proved to have a negative and significant influence on banking profitability. Net interest margin (NIM) is proven to have a positive and significant influence on banking profitability. Non-performing loans (NPLs) are proven to have a negative and insignificant effect on banking profitability. Large variations in capital structure variables in banks that go public in Indonesia can be explained by variations in the variables of capital adequacy ratio (CAR), non-performing loans (NPL), loan to deposit ratio (LDR), operational costs and operating income (BOPO), net interest margin (NIM) is 92.3%.

scholarly journals Comparative Health Analysis of the National Bank, Joint Venture Banks and Foreign Banks in Indonesia

2020 ◽  
Author(s):  
Dudi Rudianto
Keyword(s):  
Joint Venture ◽  
Capital Adequacy ◽  
The Other ◽  
Foreign Banks ◽  
Return On Assets ◽  
A Value ◽  
Capital Adequacy Ratio ◽  
Bargaining Position ◽  
National Bank

The Risk-Based Bank Rating approach (RBBR) is used to determine the health of banks in Indonesia, both for national banks, joint venture banks and foreign banks. This approach uses five (5) proxies, i.e. Non Performing Loan (NPL), Loan to Deposit Ratio (LDR), Return on Assets (ROA), Net Interesr Margin (NIM), and the Capital Adequacy Ratio (CAR). The overall result of the 5 (five) variables studied show that national banks are healthier than the other two types of banks, namely venture banks and foreign banks, because the national bank has a value beyond the provisions of Bank Indonesia. The partial variable LDR consistently varies significantly between national banks, joint venture banks and foreign banks. The LDR of joint venture banks and foreign banks is higher than the national bank. These conditions indicate that the bargaining position of joint venture banks and foreign banks in serving the needs of public borrowing is much higher than the national bank, which results in increasing the ability of both types of banks in generating profit. Simultaneously throughout the study variables was significantly different among the national banks, joint venture banks and foreign banks..  

Marketing of Banking Services in India

2017 ◽  
pp. 107-133
Author(s):  
Rakhi Arora
Keyword(s):  
Banking Sector ◽  
Technological Development ◽  
Banking System ◽  
Foreign Banks ◽  
Indian Society ◽  
Reserve Bank ◽  
Nationalised Banks ◽  
The Government ◽  
Indian Banks ◽  
Reserve Bank Of India

Banking sector plays an important role in Indian Financial Sector.It has a long history that has gone through various stages of development after Liberalization, Privatization, and Globalization (LPG) has taken place. The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks. The scheduled banks are those included under the 2nd Schedule of the Reserve Bank of India Act, 1934. The scheduled banks are further classified into: nationalised banks; State Bank of India and its associates; Regional Rural Banks (RRBs); foreign banks; and other Indian private sector banks, which are controlled and governed by Reserve Bank of India (Central Bank of India) and Ministry of Finance. In this era, the government has issued licenses to the new entrants to establish new banks to serve the Indian society. This chapter focuses on to show the various undergone phases of Indian banking system, growth of deposits and credits, technological development in Indian banking sector, services provided by the Indian banks, benefits and challenges faced by the Indian banks.

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