Study of Trends & Effectiveness of Non-Performing Assets Recovery Measures

This is MBA dissertation project report on the study of trends and effectiveness of non-performing assets recovery measures. Non-performing Assets (NPA) are frightening the stability and sabotaging bank’s profitability through a loss of interest income, write-off of the principal loan amount itself. The financial reforms helped majorly to clean NPA in the Indian banking industry. The earning capacity and profitability of the bank are highly affected due to this NPA. You can also Subscribe to FINAL YEAR PROJECT'S by Email for more such projects and seminar.

The three letters “NPA” strike terror in banking sector and business circle today. NPA is a quick form of “Non-Performing Assets”. In banking, NPA are loans given to doubtful customers who may or may not repay the loan on time. There are two types of assets viz. performing and non-performing. Performing loans are normal loans on which both the principle and interest are secured and their return is guaranteed.

Non Performing assets means the debt which is given by the bank is unable to recover it is called NPA. Non-Performing Asset (NPA) is a result of Asset-Liability Mismatch. A NPA account in the books of accounts is an asset as it indicates the amount receivable from the Defaulters. It means if any bank gives loan to the customer if the interest for that loan is not paid by the customer till 90 days then that account is called as NPA account.

Recommended MBA Project: Comparative Analysis on Non Performing Assets of Private and Public Sector Banks

The Non Performing Asset (NPA) concept is restricted to loans, advances and investments. As long as an asset generates the income expected from it and does not disclose any unusual risk other than normal commercial risk, it is treated as performing asset, and when it fails to generate the expected income it becomes a “Non Performing Asset”.

In other words, a loan asset becomes a Non Performing Asset (NPA) when it ceases to generate profits, i.e. interest, fees, commission or any other dues for the bank for more than 90 days. A NPA is an advance where payment of interest or repayment of instalment on principal or both remains unpaid for a period of two quarters or more and if they have become „past due‟. An amount under any of the credit facilities is to be treated as past due when it remain unpaid for 30 days beyond due date.

Objective of The Study

1. To know the impact of NPA’s on profitability of Banks.

2. To know the causes of NPA’s.

3. To examine the current status of NPA in Indian Banking.


To conclude, NPA or Non-Performing Assets are the types of assets which are the subject of major concerns to the banking sector and the other non-banking financial institutions. A loan or lease that does not comply the said principal sum and the interest sum payments is termed as non-performing assets.

This project on the study of trends and effectiveness of non-performing assets recovery measures deals with the types of NPA and its causes as well as its impact on the banking sector and the economy as a whole. A study was done on the various Banks of India and its associates. Use this report only for your reference and thanks to the author of this project.


Author:- Ankit Pal

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