ABSTRACT
Purpose: This research delves into the pivotal role of the banking sector in economic growth, with a focus on South Indian Bank's financial performance, particularly trends in Gross Advances, Gross Non Performing Assets (NPAs), and asset quality fluctuations from 2019 to 2023. Examining the bank's loan portfolio across sectors and assessing NPAs in priority and non-priority sectors from 2013-14 to 2022-23, the study relies on reliable sources and statistical tools. While valuable for policymakers and investors, it acknowledges limitations like time constraints and secondary data reliance. Despite these, it contributes to NPA management understanding, suggesting risk mitigation strategies for the
banking sector and concluding with industry implications and future research recommendations.
Methodology: The research relies on secondary data gathered from sources such as RBI, South Indian Bank websites, and staff members. Annual reports from 2019-2023 serve as the primary data set, extracted through the bank's website, including investor presentations. Limited data availability prompted the use of graphs and Compound Annual Growth Rate (CAGR) for comparative and analytical purposes.
Findings: The rise in NPAs is influenced by external factors such as global dynamics, pandemics, and economic slowdowns, and internal factors like government policies and inefficient management. Inadequate pre-sanction assessment and post-sanction monitoring, along with delays in identifying wilful defaulters, also contribute. Legal delays, inadequate policies, and macroeconomic factors exacerbate the issue, impacting the economy and causing capital discouragement and reduced bank earnings.
Practical Implications: As the study relies on reliable sources and statistical tools. While valuable for policymakers and investors, it acknowledges limitations like time constraints and secondary data reliance. Despite these, it contributes to NPA management understanding, suggesting risk mitigation strategies for the banking sector and concluding with industry implications and future research recommendations.
Originality/Value: To confirm the originality of this study, to the best of the authors’ knowledge, this is
the first study to examine the issues of NPAs of South Indian Bank.
Keywords: NPAs , Risk mitigation, Stressed assets Managements
Paper Type: Research Paper
REFERENCES
Agarwala, V., & Agarwala, N. (2019). A critical review of non-performing assets in the Indian banking industry. Rajagiri Management Journal, 13(2), 12-23. DOI: https://doi.org/10.1108/RAMJ-08-2019-0010
Bank, B. (2019). STRESSED ASSET MANAGEMENT & RECOVERY POLICY (SAMRP). Retrieved from https://www.bandhanbank.com/sites/default/files/2021-08/SAMR_Policy_Final-Version_Board_Approved_10062021.pdf
Biswas, D. (2014, 12). NON PERFORMING ASSETS OF SCHEDULE COMMERCIAL BANKS IN INDIA: A STUDY. Abhinav National Monthly Refereed Journal of Research in Commerce & Management, 3(12), 16-20.Retrieved from https://www.researchgate.net/publication/372861090_NON_PERFORMING_ASSETS_OF_SCHEDULE_COMMERCIAL_BANKS_IN_INDIA_A_STUDY
Dayal, Y. (2023, June 28). Financial Stability Report. Retrieved from https://rbidocs.rbi.org.in/rdocs/PressRelease/PDFs/PR493FSR27F6AB0B5CEA4F9AA39688FFC08B8D32.PDF
Dey, S. (2018, July). Recovery Mechanisms of Non-Performing Assets in Indian Commercial Banks: An Empirical Study. A multidisciplinary Online Journal of Netaji Subhas Open University, INDIA, 2(2). Retrieved from http://www.wbnsou.ac.in/openjournals/Issue/2nd-Issue/Surojit.pdf
Kaushik, M., & Kumar, D. (2023). An Empirical Investigation of the Relationship between Recovery Management Practices and Npa Levels In Indian Banks. Journal of Namibian Studies, 33(3), 1944-1963. DOI: https://doi.org/10.59670/jns.v33i.2281
Khandelwal, M., & Sharan, D. (2022). NPA's in India. Parliament, Library and reference, research, documentation and information service (LARRDIS), 3-17. Retrieved from https://parliamentlibraryindia.nic.in/lcwing/NPAs %20in%20ndia.pdf
M, P., & Philip, B. (2023). A Study on The Financial Performance of The South Indian Bank. PriMera Scientific Engineering, 2(5), 2-13. Retrieved from https://primerascientific.com/pdf/psen/PSEN-02-049.pdf
mint. (n.d.). Retrieved from https://www.livemint.com/news/india/banks-gross-npa-drops-to-7-year-low-at-5-net-npa-at-a-decade-low-rbi-s-fsr-11672318983978.html
Mishra, D. M., &Pawaskar, J. R. (2017, March). A Study of Non-Performing Assets and its Impact on Banking Sector. Journal for Research, 03(01). Retrieved from http://www.journal4research.org/articles/J4RV3I1007.pdf
Mohan, R., & Ray, P. (2017). Indian Financial Sector: Structure, Trends, and Turns. IMF Working Papers, 5-16. DOI: https://doi.org/10.5089/9781475570168.001
Mukhopadhyay, A. (2018). Finding Innovative Solutions to India's NPA Woes. ORF ISSUE BRIEF(246), 12. Retrieved from https://www.orfonline.org/wp-content/uploads/2018/07/ORF_IssueBrief_246_NPAs _FinalForUpload.pdf
Neha S, & Pathak O.P (2017) “A Comprehensive Review Of Literature Of Micro And Tiny Finance With The Help Of MFIs And SHGs In India”, International Journal of Social Sciences & Economic Environment, Vol. 2, Issue 2, Jul-Dec, 2017, pp05-12, DOI: https://doi.org/10.53882/IJSSEE.2017.0202002
NPA's in India. (2022). PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION AND INFORMATION SERVICE (LARRDIS). Retrieved from https://parliamentlibraryindia.nic.in/lcwing/NPAs %20in%20ndia.pdf
R.Priyadharshini. (2018, February). A STUDY ON EFFECTIVE MANAGEMENT PRACTICES OF NPA IN SOUTH INDIAN BANK. INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH, 7(2), 15-20. Retrieved from https://www.worldwidejournals.com/international-journal-of-scientific-research-(IJSR)/fileview.php?val=February_2018_1517574232__199.pdf
Rajender, K. (2009). Management of non performing assets in public sector banks. The Indian Journal of Commerce, 62(1), 45-54. Retrieved from http://icaindia.info/wp-content/uploads/2019/03/Indian-Journal-of-Commerce-January-March-2009.pdf#page=51
Rana, C. (2019, May). A Study on Management of Non-Performing Assets in Context of Indian Banking System. International Journal of Science and Research (IJSR), 8(5), 73-77. Retrieved from https://www.ijsr.net/archive/v8i5/ART20197502.pdf
Rathore, P., Malpani, D., & Sharma, S. (2016). Non Performing Assets of Indian Banking System and its Impact on Economy. IOSR Journal of Economics and Finance (IOSR-JEF), 7(6), 21-26. DOI: https://doi.org/10.9790/5933-0706032126
Saluja, M. R., & Lal, D. R. (2010). Comparative Analysis on Non performing Assets of public sector, private sector and Foreign Banks in India. International Journal of Research in Commerce and Management., 1(7), 80-88. Retrieved from https://www.ijrcm.org.in/
secretariat, l. s. (2014). Non-Performing Assets and public Sector Banks in India. PARLIAMENT LIBRARY AND REFERENCE, RESEARCH, DOCUMENTATION , 2-3. Retrieved from https://loksabhadocs.nic.in/Refinput/New_Reference_Notes/English/Non-Performing.pdf
Secretariat, L. S. (2022). NPA's,s in India. Retrieved from https://parliamentlibraryindia.nic.in/lcwing/NPAs %20in%20ndia.pdf
Sikdar, A. (2020). NPAs and its effects on banks’ profitability. THE TIMES OF INDIA. Retrieved from https://timesofindia.indiatimes.com/blogs/economic-update/NPAs -and-its-effects-on-banks-profitability/
South Indian Bank. (n.d.). Retrieved from https://www.southindianbank.com/
Vibhute, N. s., Jewargi, D. b., & Haralayya, D. (2021). Study on nonperforming assets of public sector banks. SSRN Electronic Journal, 4(12), 52-61. Retrieved from https://www.researchgate.net/publication/352399977_Study_on_Non_Performing_Assets_of_Public_Sector_Banks
