A PROJECT REPORT ON

A STUDY ON NON PERFORMING ASSETS AT SBI

YALHANKA BRANCH BANGALORE"
AT
STATE BANK OF INDIA"
PROJECT REPORT

Submitted by
MR.VISHWANATHA.B.V
ROLL NO: 13A4CFA031

Project Report submitted as a part of partial fulfillment of the

requirement for the completion of the degree MFA 2015

INSTITUTE OF BUSINESS MANAGEMENT & TECHNOLOGY

#298, 100 FEET RING ROAD, BSK 3RD STAGE, BANGALORE 560085

INTRODUCTION

NPA is a classification used by financial institutions that refer to loans that are in jeopardy of
default. Once the borrower has failed to make interest or principle payments for 90days the loans
is considered to be a non-performing asset. Non-performing assets are problematic for financial
institutions since they depend on interest payments for income. Troublesome pressure from the
economy can lead to a sharp increase in non-performing loans and often results in massive writedowns.

2.2 Statement of the problem

This report explores an empirical approach to the analysis of Non-Performing Assets (NPAs)
with special reference of state bank of India bank. The NPAs are considered as an important
parameter to judge the performance and financial health of banks. The level of NPAs is one of
the drivers of financial stability and growth of the banking sector. This report aims to find the
fundamental factors which impact NPAs of banks. A strong banking sector is important for
flourishing economy. The failure of the banking sector may have an adverse impact on other
sectors. Non-performing assets are one of the major concerns for banks in India.
NPAs reflect the performance of banks. A high level of NPAs suggests high probability of a large
number of credit defaults that affect the profitability and net-worth of banks and also erodes the
value of the asset. The NPA growth involves the necessity of provisions, which reduces the
overall profits and shareholders value.
The issue of Non-Performing Assets has been discussed at length for financial system all over
the world. The problem of NPAs is not only affecting the banks but also the whole economy. In
fact high level of NPAs in Indian banks is nothing but a reflection of the state of health of the
industry and trade.
This report deals with understanding the concept of NPAs, its magnitude and major causes for an
account becoming non-performing, projection with special reference to STATE BANK OF
INDIA

2.3 OBJECTIVES OF THE STUDY:

The basic idea behind undertaking the Project on NPA was to:
1. To understand the concept of NPA & its impacts on SBI
2. To study the past trends of NPA at SBI bank.
3. To analyze financial performance of SBI banks at different level of NPA
4. To learn the reasons / causes of NPA at SBI.

2.4 SCOPE OF THE STUDY:

This study is conducted to overcome from the NPA impact to whole SBI bank. Hence area of
study is restricted to only non performing assets and different types of NPAs.
The main purpose of the study is to find out where exactly the SBI NPA level has impacted and
how it affects to growth of bank. This will help to find out the position of the NPA and its
impacts, and to take necessary alternative steps to improve and minimize the level of NPA
through its performance.

2.5 Methods of research

The method of research is descriptive research. The descriptive research design is used when the
purpose of study is to learn who, when, where and how of a topic.
In this study this method is used to know about NPA (non-performingassets) and measures of
levels of NPA in different period and with maintaining profits levels in different economic
situations. The convenient sample to be used for this report.

SAMPLE METHOD
Sampling unit
The sampling unit is financial statements

Size of the sample

The size of sample is past 5 year data considered that is 2009 to 2011.

The data collection design

Sources of data
1. Primary data
2. Secondary data
1. Primary Data:
Primary data can be called as collection of the first time and which may not have been
collected from others. The data of the study was collected with the help of discussion
with the managing executives of Non performing assets.
Primary sources of data is collected through company relationship manager regarding
sanction of loans and recovering, and understanding the legal proceedings executed by
the banks.

2. Secondary Data:

Secondary data is that, which is collected from sources, which have been collected and
compiled for another research. Secondary data collected through internet sources, materials
provided by the company, annual report of the company, brochures, fact sheets etc.
Secondary source of data is collected through,
Annual reports of SBI
Journals and magazines related to banking sector.

1.5Limitations of the study

This study mainly depends on secondary data

The primary data is collected from the responsible authorities of the banks subjects to
their maximum disclosure limit

The annual reports is related to SBI bank only

Availability of data is constrained by time period.