Non-Performing Assets in Cooperative Banks
Contents: Preface. Abbreviations used. 1. Non-Performing Assets in short term cooperative credit structure--a conceptual framework. 2. District Central Cooperative Banks and Non-Performing Assets in India. 3. Non-Performing Assets in District Central Cooperative Banks in Tamil Nadu. 4. Non-Performing Assets in Dharmapuri District Central Cooperative Bank. Bibliography. Annexure. Index.
"Non-Performing Assets (NPAs), as a syndrome, though not new to the Cooperative Banking Structure has been causing trouble and confusion during the recent past. Because NPAs as the percentage to total recoverable funds acts as a constraint on the efficiency of the lending institution and their capacity to borrow funds and lend to agriculture. At all India level, the total loan issued by DCCBs during the year 1950-51 was Rs. 83 crores. This has increased over the years and stood at Rs. 81025 crores during the year 2005-06. Though the quantum of loans increased over the year, the syndrome of cooperative credit i.e., the overdues have been deeply rooted into the system and block the flow of credit to agriculture. Shri Balasaheb Vikhe Patil, rightly said, "for any credit system to sustain its operations on a viable basis, it is necessary to enforce strong credit discipline among its clients. The cooperatives need to take the problem of low recoveries. They have to draw lessons from their counterparts elsewhere who are able to show consistently high recovery performance" (NABARD: 2000; p. 137). Inordinate delay in recovery of loan builds up NPAs, which affect the health of Cooperative Banks. The Committee on Banking Sector Reforms reported that funds blocked in NPAs increase the cost of financial intermediation as banks resort to raising deposits and borrowings at a higher cost as a measure to minimize the balance between the cash outflow and cash inflow arising out of the NPAs and the money locked up NPAs are not available for productive uses and to the extent that banks seek to make provisions for NPAs. This has an adverse impact on the profitability of the banks both in short and long run. So, Reserve Bank of India (1999) in its report on NPAs stated that reduction in NPAs should be treated as a national priority.
As the concept of NPA is of recent origin, only few books are available to study the level of NPAs in banking sector. The present book will satisfy the academic needs of students and researchers in banking in general and cooperative banking in particular." (jacket)
