project report of sbm

8/12/2019 project report of sbm

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”A STUDY ON NONPERFORMING ASSETS IN

STATE BANK OF MYSORE”

Project Guide:

Mrs. Neena Prasad

Asst. Professor

DSCE DOMS

Extern! Guide

Mr. Dinesh Ubar

Branch managerSBM

By:

Abhijna.P

eg No. !DSO"MBA#$



"OMPANY PROFI#E

Founded : Mysore% !&!$ 'as Mysore ban()

$ed o%%ice : Banga*ore

Ke& (eo(!e : Managing Director P.P.Pattanaya(

Product) : *oans% credit cards% sa+ings.

S!o*n : ,or(ing for better tomorro,

Indu)tr& : ban(ing% ins-rance and a**ied ind-stries



NPA : NON+PERFORMING ASSET

Meaning:

An asset% inc*-ding a *eased asset% becomesnonerforming ,hen it ceases to generate incomefor the ban(.

A NPA is a *oan or an ad+ance ,here /nterest

and0 or insta**ment of rincia* remain o+erd-e fora eriod of more than &# days in resect of a term*oan.



INTRODU"TION

OB,E"TI-E OF T$E STUDY:

2o ana*y3e the NPA and its re*ation ,ith oerating

rofit of the ban(.

2o st-dy the genera* reasons for assets become NPAs.

2o oint o-t the amo-nt of NPAs in SBM.4hat is the criteria to reco+er the ad+ances from the

ban(.

4hat are the methods adoted by the ban( to *oo(after NPA management.

Sco(e o% t.i) )tud&: 2o resent a ict-re of mo+ement of NPA in SBM. 2o (no, ho, NPA *e+e* ,i** affect the rofit of the

ban(.



RESEAR"$ DESIGN

Stte/ent o% (ro0!e/: 2he ban( ,i** a*,ays face the rob*em of NPA

beca-se of oor reco+ery of ad+ances granted by theban( and se+era* other reasons *i(e adoting a oorreco+ery strategies so ,hen the *oan is not reco+eredfrom the ban( effecti+e*y and efficient*y that ba*ance

amo-nt ,i** become the NPA to the ban( it may createsome h-ge rob*em to the ban(5s net rofit.

2he st-dy com*ete*y deends on the )econdr&dt.

2he secondary data co**ected from 6 SBM5s ann-a* reorts. B/5s Ann-a* reorts. SBM5s 7-arter*y b-**etins. SBM5s ,ebsite.



ANA#YSIS

Ite/)1223+24

1224+25

1225+26

1226+27(rojected

Gro)) NPA!e8e! 976;9 96954 954 994O(ertin*

(ro%it <96 <5;36 3;3 51;

In%erence:

8rom the chart%

it is -nderstoodthat as the grossNPA *e+e* starteddecreasing inrecent year%oerating rofitstarted increasingdrastica**y.

Gro)) NPA 8=) O(ertin* (ro%it



"ORRE#ATION TEST

Gross NPA

Operating

profit

Gross NPA Pearson Correlation 1 -.992(**)

Sig. (2-tailed) .008

N

Operating

Profit

Pearson Correlation -.992(**) 1

Sig. (2-tailed).008

N

INFEREN"E:

2here is a negati+e corre*ation e9ists bet,een gross NPA of a

ban( ,ith oerating rofit at a #.#! *e+e* significance. So !is acceted% ,hich states there is a significant re*ationshibet,een gross NPA of a ban( to its oerating rofit.

HYPOTHESIS H0: There is no significant relationship between gross NPA of a bank to its

operating profit.

H1: There is a significant relationship between gross NPA of a bank to its

operating profit.

** Correlation is significant at the 0.01 level (2-tailed).



RE"ENT YEAR NPA PERFORMAN"E"$ART

Stte 0n>o% M&)ore

1229+2<

122<+23

1223+24

1224+25

1225+26

Grou(8er*e1225+26

A!!

0n> )8er*e1225+26

Net NPArtio ;.&< #.&; #."= #.=> #.=$ !.=$ !

In%erence:

/n recent

years Net NPAratio has comedo,n drastica**y%,hich is +ery

m-ch be*o, thestandard *e+e* of!% ,hich is +eryfa+orab*e for theban(.



"OMPARISON ?IT$ OT$ER GROUPBANKS

In%erence:

Comared to

a** other gro-ban(s SBM is ingood osition,ith #.=$ NPAratio.

SBM

SBI &

its associates

nationalised

banks

Foreign

banks

All

banks

Net NPA

Ratio 0!" #!" 0$$ 0$% #



SE?MEN2 4/SE POS/2/ON O8 NPAS

Segent Position

as '00$

Red(ctio

ns d(ring

t)e *ear

Addition

s d(ring

t)e *ear

Position

as '00%

Ind(str* #!#"% #'!$% +,,! ##'#!

Trade ''$+ #"0' #!"" '!#0

SSI !,0% #,%$ %'% "$!+

SBF !$-# '0'0 #%#! !,,,

A.R "%'" #+-$ ##-% "0'!

Personal %!,' "-$! -#$0 #0+!%

Misc !#, !#, / /

TOTA "%"$- '"!!" '0+-$ ",+00



FINDINGS 2he ban( has achie+ed its target beca-se the net

rofit is a*so increased and there is a decrease inNPAs. So it is in better osition comared to *ast year.

2he tota* NPA is $"< crore% *ast year it ,as $@$."<

crore.

2he *oans and ad+ances ha+e been increased from;##<#" to ;##"#@

2here is decrease in do-btf-* assets comared to *astyear.

2here is a s*ight decrease in OA b-t there is a s*ight

increase in OE.

SUGGESTIONS AND



SUGGESTIONS ANDRE"OMMENDATIONS

Effecti+e insection system sho-*d beim*emented.

Oerating staff sho-*d scr-tini3e the *e+e* ofin+entories0recei+ab*es reg-*ar*y.

arge e9os-re on big cororate or sing*e rojectsho-*d be a+oided.

Une+en sca*e of reayment sched-*e ,ith higherreayment in the initia* years norma**y isreferred.



"ON"#USION

/t is not ossib*e to e*iminate tota**y the NPAs in the ban(ingb-siness b-t can on*y be minimi3ed. /t is a*,ays ,ise itfo**o, the roer o*icy araisa*% s-er+ision and fo**o,-of ad+ances to a+oid NPAs.

2he ban(s sho-*d not on*y ta(e stes for red-cing resentNPAs% b-t necessary reca-tion sho-*d a*so be ta(en toa+oid f-t-re NPAs.

B-t in the case of SBM it is one of the good sign that the

amo-nt of NPA is decreased from *ast financia* year and itsho-*d be mo+e *i(e this in f-t-re.



REFEREN"E

Stte Bn> o% M&)ore

Ann-a* reorts

Other circ-*ars

Re)er8e Bn> o% IndiAnn-a* reorts

NPA circ-*ars

Internet )ource): ,,,.rbi.org.in ,,,.eeaecon.org ,,,.thehind-b-siness*ine.co ,,,.icai.org ,,,.stateban(ofmysore.co.in

Boo>) nd rtic!e): Ban( Management: 2imothy

4. och

Ban(ing theory and ractice:

.C.She(har SBM: Po*icy g-ide*ines ;##@

#&

B-siness ,or*d maga3ine

Ne,s aer artic*es

http://www.rbi.org.in/

http://www.eeaecon.org/

http://www.thehindubusinessline.com/

http://www.icai.org/

http://www.statebankofmysore.co.in/

http://www.statebankofmysore.co.in/

http://www.icai.org/

http://www.thehindubusinessline.com/

http://www.eeaecon.org/

http://www.rbi.org.in/



2han( o-.F

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project report of sbm