A STUDY ON CREDIT RISK MANAGEMENT OF AXIS BANK

Project work report submitted to Dayananda Sagar University in partial

fulfillment of the requirements for the award of degree of

Bachelor of Commerce

Submitted by

Under the guidance and supervision of

Dr. TEJASWINI BASTRAY

SCHOOL OF COMMERCE AND

MANAGEMENT STUDIES

DAYANANDA SAGAR UNIVERSITY

BENGULURU
 DECLERATION

I,) hereby declare that the project works Entitled “A STUDY NON PERFERMONING ASSET
ON AXIS BANK(CREDIT RISK MANAGEMENT OF AXIS BANK)Submitted To
Dayananda Sagar University in partial fulfillment of the requirements for the award of B.com, is
a record of independent project works carried out by me under the supervision and guidance of
Dr. TEJASWINI BASTRAY School of Commerce and managementstudies, Dayananda Sagar
University, Bangalore. This work not formed the basis for the award of any Degree and has not
been Submitted previously to any other College/University.

PLACE:
 ACKNOWLEDGMENT

I am very grateful to take this opportunity to express gratitude to those who have been helpful to
me in completing this project report. I would like to express my special thanks to my Dean, ,
School of Commerce and Management Studies, Dayananda Sagar University, who allowed me to
undertake the project. I would be failing in my duty if I do not express my deep sense of
gratitude to Dr TEJASWINI BASTRAY., Professor, School of Commerce and Management
Studies, Dayananda Sagar University, Bangalore, without his guidance it would not have been
possible for me to complete this project. School of Commerce and Management Studies,
Dayananda Sagar University, who helped me throughout this project. project and also
contributed directly or indirectly in completing my Lastly, I would like to thank my friends who
encouraged me to do this project.
 Contents Pg.No
Chapter 1 Introduction
Meaning
Classification
Symptoms
Precautions
Factors
Measures
Chapter 2 Company Profile
Introduction (Banking Sector)
Introduction (Axis Bank)
Chapter 3 Research Methodology
Explanatiom
Sample Design
Sampling
Tools and techniques for Data Collection
Limitation on the study
Scope of the study
Chapter 4 Data Analysis
Position of gross NPA\net NPA
Analysis of NPAs
Key performes ratios
Chapter 5 Findings, Suggestions and Conclusion
Findings
Suggestions
Conclusion
 List of Tables

SL.NO TITLE OF THE TABLES

1 Position of Gross NPAs /NET NPAs
2 Standard Asset Ratio
3 Sub-Standard Asset Ratio
4 Doubtful Asset Ratio
5 Net NPAS Ratio
6 Return on Capital Employed
7 Current Account Saving Account
8 Net Profit Margin
9 Return on Asset
10 Net Interest Margin
SL.NO List of Graph

1 Standard Asset Ratio

2 Sub-Standard Asset Ratio

3 Doubtful Asset Ratio

4 Net NPAS Ratio

5 Return on Capital Employed

6 Current Account Saving Account

7 Net Profit Margin

8 Return on Asset

9 Net Interest Margin

CHAPTER-1
 INTRODUCTION

Finance is defined as the management of money and includes activities such as investing,
borrowing, lending, budgeting, saving, and forecasting.

The easiest way to define finance is by providing examples of the activities it includes. There are
many different career paths and jobs that perform a wide range of finance activities. Below is a
list of the most common examples:

Investing personal money in stocks, bonds, or guaranteed investment certificates (GICs)

Borrowing money from institutional investors by issuing bonds on behalf of a public company
Lending money to people by providing them a mortgage to buy a house with
Using Excel spreadsheets to build a budget and financial model for a corporation Saving
personal money in a high-interest savings account Developing a forecast for government
spending and revenue collection

1.1 Credit Risk

Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet
contractual obligations. Traditionally, it refers to the risk that a lender may not receive the owed
principal and interest, which results in an interruption of cash flows and increased costs for
collection.

 Excess cash flows may be written to provide additional cover for credit risk. When a lender
faces heightened credit risk, it can be mitigated via a higher coupon rate, which provides for
greater cash flows

1.2 MEANING
 A non-performing asset refers to a classification for loans or advances that are in default or in
arrears A loan is in arrears when principal or interest payments are late or missed. A loan is in
default when the lender considers the loan agreement to be broken and the debtor is unable to
meet his obligations

Nonperforming assets are listed on the balance sheet of a bank or other financial institution.
After a prolonged period of non-payment, the lender will force the borrower to liquidate any
assets that were pledged as part of the debt agreement.

1.3 DEFINITIONS

 Non - performing asset was defined as a credit facility in respect to which the interest and
installment of principal has remained past due for a specific period of time
 NPAs can be classified as a standard asset, substandard asset, doubtful asset, or loss asset,
based on the length of time overdue and probability of repayment. –
 Standard asset- These are assets which are regular in paying interest/installment & its
operations are Asset Classification NPA
 Substandard asset- an asset classified as an NPA for less than a period of 12 months.
 Doubtful asset - an asset that has been non-performing for more than a period of 12
months.
 Loss assets - loans with losses that need to be fully written off. It is identified by the
bank, auditor, or inspector
 India being a developing country has been progressing since independence with the great
support of banking system in the country. the non- performing assets are found more
comparatively in the public sector banks in comparison to private bank because of liberal
rules for the debt recovery
1.4. Classification of non -performing assets

Standard Asset:

These are assets which are regular in paying interest/installment & its operations are Asset
Classification NPA – Asset Classification & Income Recognition Asset Classification & Income
Recognition normal. The bank categories the receivable as standard asset even through the
payment is due more than 90 days because the payer is consistent in his payment in the past and
the bank has a hope that the buyer may pay in the early short period

Sub – Standard Asset:

Sub-standard asset was classified as NPA for a period not exceeding two years but with effect
from 31 March 2001,. The account which did not generate income for the bank through the
payment of principal installment or the interest for more than 90 days. The accounts which
default from 90 days to 2 years are classified as Sub-standard asset
Doubtful Assets:

These assets are those which have remained NPA for a period exceeding two years. This period
of two years was reduced to 18 months. These assets are so weak that their collection or
liquidation in full is considered highly improbable in order to arrive at the amount of provision to
be made against doubtful assets, unsecured portions and the secured portions of these assets.

Loss Asset:

A loss asset is one which has been identified by the bank or internal or external auditors or the
RBI inspectors, but the amount has been written off wholly or partly. Non-performing assets play
an important role in financial sector, where the NPAs assume a large portion if an asset is
classified as a loss of recoverability

1.5. Problems effected by Non- Performing Asset

 Non-performing loans will lead to bad investment some time. The credit may be Miss
allocated from the different good project due to which it won’t receive the failed project
 Effect of Profitability of Banks: As NPA’s cease to generate income for the banks it will
reduce the net interest income of the banks. As NPA’s goes on increasing, the net
income of the banks will decrease
 Profitability of bank  is adversely affected because of providing of doubtful debts and
consequent to writing it off as bad debts
 NPA  leads to decrease in value of share, which can be even lesser than book value
in capital  market
 The owners won’t be receiving a return on capital in the market. It will be the worst case
if it fails the owner may has a chance of lose the assets.it may affect the shareholder pool
 The increase in NPAs, the bank are forced to decrease their interest rate in order to
margin the profitability of the bank. The shortage of funds due to NPAs  prompted
the bank  to invest less in the industrial sector which affects the growth of the industrial
sector and economy of the country
1.6. Measurement taken against NPAs:

 Non-performing assets (NPAs) are a recurring feature in financial crises.

 RBI and government started pressuring the banks to implement stringent methods for
recovery of the NPAs and to improve their balance sheet
 Take strict action against large NPAs.
 Sector-specific Companies/Private equity firms must be helped to play an active role in the
stressed assets market
 The lenders must be allowed to spread their losses on sale for over two years . if the loss is
disclosed
1.7. Factors which increase the NPA in banks

A. Internal Factors:  

 Managers are not fully competent in appraising the value of collateral

 Target completion and Managers have poor skills in credit scoring. It is also found that
no administrative penalty is least important internal factor causes bad loans in the
selected banks.
 Non –compliance of legal requirements
 Strained labour relations.
 Problems in technology or updation of the product as per market requirements which can
be termed as technological obsolescence.

B. External Factors:

 Accident at office/factory/unit resulting in stoppage of business for a considerable time or

on a permanent basis
 Changes in Government policies
 Natural calamities such as flood, fire and Shortage of power, water. etc
 Abnormal price escalations of raw material or other inputs, the burden of which cannot
be passed on to the buyers
 NPA itself, where banks themselves are responsible
1.8. Banks Being Responsible For NPAs:

 Banks sometimes so much get involved in their systems and procedures, documentation
and other legal formalities that there is a delay at some stage in appraisal or sanction or
disbursement which may have an impact on the business or may result in loss of business
opportunity
 Factors like time overrun or cost overrun are already covered above
 Sometimes when external pressures work, the merits/demerits of the case get ignored
while sanctioning and often in such accounts, recovery is difficult
 Non-adherence to the terms and conditions of sanction, poor credit monitoring which
includes field visits, scrutiny of stock statements furnished by the borrower, timely
scrutiny of Balance Sheet and Profit and Loss account
 Once the account becomes NPA, some bank officials totally deny the slightest concession
or even a small credit sanction even if such sanction would finally lead to the borrower
coming out of his problems. Taking proper judgement in these cases is avoided for the
apprehension of further deterioration or staff accountability reasons. 
 Ascertaining existing income and assessment of projected income
 Timely mitigation and relief arrangements to the affected borrows
 Fixing realistic repayment schedule kepping the cash flow in view
 Conducting through and proper pre survey
 Identification of potential NPA
 CHAPTER -2

INDUSTRY AND COMPANY PROFILE

2.1BANKING SECTOR:

Banking sector in India dates back to 18th century with the establishment of Bank of Hindustan
in 1770 followed by the General Bank of India in 1786. There were a number of Public sector
banks like Bank of Bengal, Bank of Bombay which came into existence between 1800 and
1850(including State Bank of India. These banks were founded as per the charters from British
East India Company

In India, banking has developed from the primitive stage to the modern system of banking in a
fashion that has no parallel in the world history. With the dawn of independence, changes of vast
magnitude have taken place in India. After independence India launched a process of planned
economic activity in order to overcome the multitude of problems it faced as an underdeveloped
nation. The increasing tempo of economic activity leads to tremendous increase in the volume
and complexity of banking activity

A banking sector performs three Primary functions in an economy: The operation of the payment
system, the mobilization of savings and the allocation of savings to investment projects. By
allocating capital to the highest value use while limiting the .and cost involved, the banking
sector can exert a positive influence on the overall economy, and thus of broad macro - economic
importance

There are three primary sectors of Indian banking system

a. Public sector Bank

b. Private sector Bank

c. Foreign sector Bank

Private sector banks

Private sector banks play an important role in development of Indian economy. After

liberalization the banking industry underwent major changes.

The economic reforms totally have changed the banking sector. RBI permitted new banks to be

started in the private sector as per the recommendation of Narashiman committee. The Indian

banking industry was dominated by public sector banks. But now the situations have changed

new generation banks with used of technology and professional management has gained a

reasonable position in the banking industry. Private sector banks performed in a significant

manner with its branch expansion, income generation and innovative services.

Old Private Sector Banks: The old private sector banks were those banks which were

working in the private sector before the great depression. The old private sector banks have

been operating since a long time and may be referred to those banks, which are in operation

from before 1991. These banks are more than 50 years old. The banks, which were not

nationalized at the time of bank nationalization that took place during 1969 and 1980, are

known to be the old private sector banks.

New Private Sector Banks: The new private sector banks are those that have come

into operation very recently. The banks, which came in operation after1991, with the

introduction of economic reforms and financial sector reforms are called as new private

sector banks. Banking regulation act was then amended in 1993, which permitted the entry of

new private sector banks in the Indian banking sector. However there were certain criteria set for

the establishment of the new private sector banks.

Private banks in India

1. HDFC Bank
By total sales for the year, HDFC Bank  is India's largest private bank. As part of the Reserve
Bank of India's (RBI) deregulation of the Indian Banking Industry in 1994, it was one of the first
to get 'in principle' clearance to open a bank in the private sector. The top Bank Nifty constituent
is HDFC Bank.

2. ICIC Bank
ICICI Bank is India's largest private bank. ICICI Bank was established in 1994 as a wholly-
owned subsidiary of ICICI Limited, an Indian financial organization. It is one of India's best
private banks. Through a number of delivery channels and group entities, ICICI Bank provides a
wide range of banking products and financial services to corporate and retail customers. In
India's Top 5 Private Banks, ICICI is ranked second

3. Kotak Mahindra Bank

The Group's flagship firm, Kotak Mahindra Financing Ltd. (KMFL), got a banking licence from
the Reserve Bank of India (RBI) in February 2003, making it India's first non-banking finance
company to convert into a bank - Kotak Mahindra Bank Ltd. Kotak is India's fourth-largest
private bank. It is one of India's top five private banks. Over the last three years, net profit per
employee has been steadily increasing, with a 13.34 percent increase last year.
4. IDBI Bank

An act established the Industrial Growth Bank of India in 1964 to provide financing and other
financial services for the development of India's young industries. It is a development finance
institution and a publicly traded subsidiary of the Life Insurance Corporation of India. Sales fell
by 23.29 percent in the third quarter, the lowest in the previous three years. Over the last three
years, the company has steadily increased its net interest margin, with margins of 2.86 percent
last year

5.,Bandhan Bank

Bandhan Bank Ltd., headquartered in Kolkata, West Bengal, is an Indian banking and financial
services firm. With 5,596 banking outlets and over 2.35 crore customers, Bandhan Bank is
present in 34 of India's 36 states and union territories.
Public Sector Banks  :

(PSBs) are a major type of government owned banks in India, where a majority stake (i.e. more
than 50%) is held by the Ministry of Finance of the Government of India or State Ministry of
Finance of various  State Governments of India. The officers working for these entities and their
subsidiaries are  gazetted officers. The employees subordinate to the officers working for these
respective entities and their subsidiaries are also full fledged government employees . The shares
of these banks are listed on stock exchanges

Emergence of public sector banks

The Central Government entered the banking business with the nationalization of the Imperial
Bank of India in 1955. A 60% stake was taken by the Reserve Bank of India and the new bank
was named State Bank of India. The seven other state banks became subsidiaries of the new bank
in 1959 when the State Bank of India (Subsidiary Banks) Act, 1959 was passed by the Union
government.The next major government intervention in banking took place on 19 July 1969
when the  Indira  government nationalised an additional 14 major banks. The total deposits in
the banks nationalised in 1969 amounted to 50 crores. This move increased the presence of
nationalised banks in India, with 84% of the total branches coming under government control

Before the economic liberalization

The share of the banking sector held by the public banks continued to grow through the 1980s,
and by 1991 public sector banks accounted for 90% of the banking sector. A year later, in March,
1992, the combined total of branches held by public sector banks was 60,646 across India, and
deposits accounted for ₹1,10,000 crore. The majority of these banks was profitable, with only
one out of the 21 public sector banks reporting a loss.
Public Sector Banks in India

1. Bank of Baroda (BOB)

Bank of Baroda is an Indian nationalised banking and financial services company. It is under

the ownership  of the Ministry of Finance  of the government of India . It is the fourth largest
nationalised bank in India, with 132 million customers.

2. Canara Bank

Canara Bank is the third largest nationalised bank in India. It is under the ownership of
the Ministry of Finance, government of India. It is headquartered in Bangalore. Established in
1906 at Mangalore by Ammembal Subba Rao Pai, the bank also has offices in London, Hong
Kong, Dubai and New York.

3. State Bank of India

State Bank of India (SBI) is an Indian multinational public sector bank and financial

services statutory body headquartered in Mumbai, Maharashtra. SBI is the 43rd largest bank in
the world and ranked 221st in the Fortune Global 500 list of the world's biggest corporations of
2020, being the only Indian bank on the list. 

4. Punjab National Bank

Punjab National BANK, abbreviated as PNB, is an Indian nationalised bank. Headquartered at

New Delhi, India, it is under the ownership of the Ministry of Finance, government of India. The
bank was founded in May 1894 and is the second largest government-owned bank in India, both
in terms of its business volumes and its network. The bank has over 180 million customers,
12,248 branches, and 13,000+ ATMs

5. Central Bank of India

 (CBI) is an Indian nationalised bank. It is under the ownership of Ministry

Finance , Government of India and is one of the oldest and largest nationalised commercial
banks in India. It is based in Mumbai, the financial capital of India and capital city of state
of Maharashtra.
Foreign sector bank

A foreign bank branch is a type of foreign bank that is obligated to follow the regulations of both
the home and host countries. Because the foreign bank branch has loan limits based on the total
bank capital, they can provide more loans than subsidiary banks . That is because the foreign
bank branch, while possibly small in one market, is technically part of a larger bank. Hence, it
enjoys the capital base of the larger entity

Advantages of Foreign Bank Branches

Foreign bank branches tend to be more effective in countries with high taxes and nations where it
is easy for international firms to enter the market.

According to an article in the Journal of Banking and Finance, banks are more likely to organize
themselves as branches in nations that have higher corporate taxes. Depending on the country, a
branch of a foreign bank may be able to avoid some of the high taxes faced by domestic firms.

Foreign bank branches are also more likely to operate where they face lower regulatory barriers
to entry. When it is easy to enter the market, a bank does not need to spend money setting up a
subsidiary in the country

Disadvantages of Foreign Bank Branches

Foreign bank branches may face special difficulties during an economic or political crisis. Since
they operate in that foreign country during a crisis, they will be negatively impacted by events
there. At the very least, foreign bank branches stand to lose money. At worst, they might have to
deal with a run on the bank branch with little support from the foreign government.

A government in crisis is more likely to use its limited resources to support domestic banks.
Foreign banks might be left to bail out their own branches. This situation is different from a
subsidiary bank, which is technically a domestic company in the foreign country. Subsidiary
banks are also sometimes joint ventures with domestic banks, further increasing the chances that
the local government will support them.
Foreign Banks in India

1. HSBS
HSBC Bank India is a bank headquartered in Mumbai that is a subsidiary of the UK-based
HSBC Holdings plc. The Reserve Bank of India regulates it as a foreign bank under the Banking
Regulation Act, 1949. (RBI). HSBC Holdings is a multinational investment bank and financial
services holding corporation headquartered in the United Kingdom. 

2. DEUSTCHE BANK

Deutsche Bank AG is a Frankfurt-based global investment bank and financial services firm that
is dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange. The bank's
network stretches across 58 countries, with strongholds in Europe, the Americas, and Asia of 5
lakh people. The bank employs up to 11,000 individuals with 18 branches and provides all basic
financial services. On-shore investment banking, institutional equities broking, asset and private
wealth management, retail banking, and business processing outsourcing are among the financial
products and services it provides.

3. DBS BANK

DBS Bank Ltd, located in Marina Bay, Singapore, is a Singaporean multinational banking and
financial services organization. The Development Bank of Singapore Limited was the company's
previous name before its current name was adopted on July 21, 2003, to represent the company's
evolving role as a global bank. DBS is Asia's #1 Safest Bank, and its global strength has earned
it a top score among commercial banks and a spot among the world's 15 Safest Banks. These
findings demonstrate DBS' trustworthiness to investors, business clients, and retail depositors.
Loans, credit cards, and a plethora of NRI services are among the services provided by this
worldwide bank
4.BARCLAYS BANK

Barclays is a constituent of the FTSE 100 Index and has its principal listing on the London
Stock Exchange. The New York Stock Exchange has a secondary listing for it. The Financial
Stability Board considers it a systemically important bank. Barclays plc, headquartered in
London, England, is a British global universal bank. Barclays is divided into two divisions:
Barclays UK and Barclays International, with Barclays Execution Services as a service company.
The bank, which is headquartered in Mumbai, has seven branches around the country.
Commercial Banking, Loans, Credit Cards, and Treasury Solutions are just a few of the top
services provided by the bank

5.BANK OF AMERICA

The Bank of America Corporation (often abbreviated as BofA or BoA) is an American global
investment bank and financial services holding company with headquarters in Charlotte, North
Carolina. Bank of America was founded in San Francisco in 1998 as a result of NationsBank's
acquisition of BankAmerica. The bank began operations in 1964 and currently has only 5 offices
in India. With 4.9 million customers, it is still one of the largest banks in the world
 AXIS BANK

2.2INTRODUCATION

Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the Unit Trust of India

The Bank's Registered Office is at Ahmedbad and its Central Office is located at Mumbai.

The Bank has a very wide network of more than 1281 branches (including 169 Service
Branches/CPCs as on 31st March, 2011). The Bank has a network of over 6270 ATMs (as on
31st March, 2011) providing 24 hrs a day banking convenience to its customers. This is one of
the largest ATM networks in the country.

The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.

Axis Bank Ltd. has been promoted by the largest and the best Financial Institution of the
country, UTI. The Bank was set up with a capital of Rs. 115 crore, with UTI contributing Rs.
100 crore, LIC - Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crore each
2.3BOARD OF DIRECTORS

Adarsh Kishore Chairman

Shikha Sharma Managing Director and CEO

S. K. Chakrabarti Deputy Managing Director

J. R. Varma Director

R. H. Patil Director

Rama Bijapurkar Director

R. B. L. Vaish Director

M. V. Subbiah Director

K. N. Prithvira Director

V. R. Kaundinya Director

S. B. Mathur Director

S. K. Roongta Director

Prasad R. Menon Director

R. N. Bhattacharyya Director

P. J. Oza Company Secretary

2.4Shareholders of Axis Bank

Holders Name No of Shares % Share Holding

No Of Shares 3066645378 100%

Promoters 348013811 11.35%

Foreign Institutions 1536846830 50.11%

Banks Mutual Funds 586484418 19.12%

Others 200359618 6.35%

General Public 148430499 4.84%

Financial Institutions 170836357 5.57%

GDR 75673845 2.47%

Axis bank

Vision and Values

To be the preferred financial solutions provider excelling in customer delivery through insight,
empowered employees and smart use of technology

Core Values

Customer Centricity

Ethics

Transparency

Teamwork

Owner

Mission

Axis Bank's mission is to be the preferred financial solutions provider excelling in customer
delivery through insight, empowered employees and smart use of technology
2.5SWOT ANALYSIS

Strengths in the SWOT Analysis of Axis Bank

 Axis Bank was ranked is the fastest growing Bank in the Private Sector. Financial
Express and KPMG have rated Axis Bank as the best bank on the basis of 26 parameters

 Banks ‘ financial positions are rising at a rate of 20% last year, which is a big positive
sign for every country.

 One of India’s largest private-sector funding for agricultural loans is Retail Agri &
Corporate Agri

 Axis Bank has 4800 regional branches and 17801 ATMs

 Great online services provided by Axis Bank, such as net banking, smartphone phones,
etc
 Effective ads and branding have helped the brand to expand.

Weaknesses in the SWOT Analysis of Axis Bank

 The rural market is also a major market for Axis Bank.

 The internet banking network can be supported

 UPI payments and mobile wallets can be promoted.

 Not able to fill the need of Various future prospects in financial markets, such as mutual
funds, maybe exploited in the Bond Market.
 Lower branch number relative to its rivals.

 Axis Bank has minimal market share due to high competition in the banking sector.
Opportunities in the SWOT Analysis of Axis Bank
 The rural market is also a major market for Axis Bank.
 Acquisitions for filling the void. Various future prospects in financial markets, such as
mutual funds, maybe exploited in the Bond Market.
 The internet banking network can be supported.
 UPI payments and mobile wallets can be promoted.
 Since it’s a new era of banking, there are a lot of opportunities to provide innovative
banking solutions techniques compared to established major players.
 The Assets of Axis Bank are rising at a much faster growth rate of 9%.
 AXIS Bank ‘s definition of ATM had a strong response in terms of attracting new
customers to the personal banking market.

Threats in the SWOT Analysis of Axis Bank

 RBI control of interest rates.

 Regulation of the State on the basis of pandemic circumstances.

 Foreign Investments in Banking Sector.

 Government schemes are most frequently run only by SBI, Indian Banks, Punjab
National Bank, etc.

 ICICI and HDFC are placing their aggressive marketing campaigns at significant risk in
terms of their growth in the consumer base.

 New banking license issued by Reserve Bank Of India

2.6Services by Axis bank

1. Home loan by Axis bank:-

Home Loan affordability calculator is based on your requirements, such as tenure, loan amount
and interest rates to give you an estimate of your EMI. Explore our wide range of products for
the most competitive Home Loan interest rates, extended loan tenures and other benefits like
EMIs waivers

2. Car loan by Axis bank

Axis Bank offers uniquely tailored car loan products that take the pain and hassle out of buying a
car. Flexible, transparent, quick, and cost-effective, our car loans put the joy back into owning a
car

Attractive interest rates on car loan LTV of up to 90% of the ex-showroom price on select
models ,Special car loan schemes for Axis Bank Salary accountholders , Banking surrogate
schemes available ,Loans offered from Rs. 1 lakh .

3. Personal loan by Axis bank

Axis Bank Personal Loans offer fast processing of your loan. Personal Loans can be used for
plenty of purposes .Personal Loan from Rs. 50,000 upto Rs. 15,00,000 with minimal
documentation and speedy approval from Axis Bank. Also, you can transfer your existing high
interest Personal Loan to Axis Bank as well. With a quick approval on Personal Loans.

4. Loan Against Shares by Axis bank

Overdraft facility against single and combination of scripts in dematerialized form from the list
of approved scripts

Facility will be renewed / reviewed after 12 months from the date of sanction

Interest charged on actual amount utilized - no EMI or post dated cheques required
Shares can be pledged from any Depository Participant across the country

5. Loan Against Property

The bank will give you a loan against your property. Be it commercial or residential. You can
also apply for this loan if you need funds to acquire new property. A take-over of your existing
loan with refinancing is also possible with Loan Against Property

Attractive interest rate

Balance Transfer facility available with additional finance

6. Education Loan

Axis Bank's Study Power aims to provide financial support to deserving students for pursuing
higher professional or technical education in India and abroad. The loan would be provided to
students who have obtained admission to career-oriented courses.

Example :- medicine, engineering, management etc., either at the graduate or post-graduate level
.
2.7Primary Services

1. Fixed deposit

 Fixed Deposit online with Axis Bank and save a minimum of Rs. 5,000 for a flexible tenure
starting from a minimum of 7 days to a maximum of 10 years. It provides easy transfers from
your savings account to your Fixed Deposit. Get the most competitive Fixed Deposit interest
rates for both long and short term investments. Axis Bank provides you automatic roll-out
facility so that you can get your Fixed Deposit interest credited to a designated account or get it
paid out to a different account.

2. Recurring Deposite

 Recurring deposits are accepted in equal monthly installments of minimum Rs 1,000 and
above in multiples of Rs 500 thereafter.
 Recurring Deposit accounts can be opened for a minimum period of 12 months and in
multiples of 12 months thereafter, up to a maximum of 120 months.
 The amount of installment once fixed, cannot be changed
 Tax Sever Fixed Deposit
 Fixed tenure without premature withdrawal
 Year is defined as a financial year
 Amount limited to Rs. 100 minimum and Rs. 100,000 maximum.
 Bank will issue a Fixed Deposit Receipt that shall be the basis of claiming tax benefit.
 Term deposit under this scheme cannot be pledged to secure a loan.
Features and Services

 Account details
 Fund transfer
 Request services
 Investment services
 Value added services
 View internet banking services

2.8 Secondary services

1. Agency service
The bank acts as a agent to its customers. It performs various activities on behalf of the
customer and pays insurance premium, rent, taxes, bills etc. In return to this activities it charges
few amount of commission.

2. General services
a Issue of loans, letter of credit, drafts etc

b locker service

C Foreign exchange service

d underwriting of offers etC

 CHAPTER-3

RESEARCH METHODOLOGY

3.1EXPLANATION:

The study was regarding Non performing asset of Axis Bank Limited and comparative analysis
During the course of the study I visited a no. of branchs that were there in bangalore. It was very
difficult to tabulate all the record and then carry out our study, in the short span of time that was
allotted. As a result I had to select the branches of axis bank according to my convenience. I
went to the areas and surveyed all branches that could possibly be approached.

3.2Sample Design :

A sample design is a definite plan for obtaining a sample for a given population. It refers to a
techniques or procedure adopted in selecting items for the sample.

3.3 Sampling :

Further, the design that has been adopted for the study of the given topic is Non performing
asset of Axis Bank Limited
3.4 Tools and techniques for Data Collection

The researchers collected data during the course of research period with the help of the
questionnaire that was designed for the bank employee to collect the information that was
required to carry out the research.

3.5 Limitations on the study

The lack of data and information due to confidentiality of some banks

The data is constant till the research date and the data and performance can be different after the
research

In depth research may not be possible

3.6 Scope of the study

Study involves the impact of Non Performing Asset on the banks, Study includes the various
kind of headings related to Non Performing Asset,Study contains the comparison of different
percentages of Non Performing Asset
 CHAPTER-4

DATA ANALYSIS

4.1Position of Gross NPA / Net NPA of Axis BANK

Sl .N Particulars 2017-18 2018-19 2019-20 2020-21

o
1 Gross 2874265.7 3 3478571.92 3926291.51 4645934.91
Advance
2 Gross NPAs 41102 60875 212805 342870
3 Gross NPAs 1.43 1.75 5.42 7.38
% Gross
Advances
4 Total - - - -
Deductions
5 Total 26293 36000 122981 174132
Provisions of
NPA
6 Net NPAs 13167 25221 86266 165983
7 Net Advances 2862391.30 3454931.50 3817079.65 4498184.28
8 Net NPAs as 0.46 0.73 2.26 3.69
% of Net
Advances
Table 4.1

INTERPRETATION

As show on the above tablethe gross npa % gross advance ratios also got increased. The total
provisions of npa , net NPA,s ,net advances also got increase year by year as shown in the above
table. The net NPAs as percentages of net advances also got increased. The performance NPA of
the axis bank .
4.2 ANALYSIS OF NPA’s

1.STANDARD ASSET RATIO

If the borrower regularly pays his dues regularly and on time; bank will call such loan as its
“standard assets”. The ratio is calculated as

Formula:

Standard Asset Ratio= Total Standard Asset

Gross NPAs *100

YEAR STANDARD GROSS NPAs PERCENTAGE

ASSETS (Rs in (Rs in Millions)
Millions )
2017-18 1012.00 1012.00 2.47

2018-19 346.00 60875.00 0.57

2019-20 3558.00 212805.00 1.67

2020-21 2755.00 342870.00 0.80

Table No4.2
tab

Chart Title
400000

350000

300000

250000

200000

150000

100000

50000

0
2017-18 2018-19 2019-20 2020-21

STANDARD ASSETS (Rs in Millions ) GROSS NPAs

PERCENTAGE

Graph no4.2

INTERPRETATION

In the data analysis represents from the above table and graph it shows that NPAs percentage .it
goes on increasing in each year. The highest npa percentage in the year 2017-2018 is 2.47% & in
the year 2020-21 it reduced to 0.80%.where in the bank has its fresh Npa and properly controlled
& followed the provision & guidelines of the RBI
2.SUB – STANDARD ASSETS RATIO

The sub standard assets ratio will help to understand the portion of fresh NPAs in the gross
NPAs. Further this ratio will help the banks administration to evolve a useful strategy to
minimize NPAs at the shortest possible time with less expense. The ratio is calculated as

Formula

Sub Standard Assets = Total sub – Standards assets

Gross NPAs *100

YEAR SUB –STANDARD GROSS NPAs PERCENTAGE

ASSETS (Rs in (Rs in Millions)
Millions )
2017-18 10584.00 41102.00 25.75
2018-19 16139.00 60875.00 26.51
2019-20 58394.00 212805.00 27.41
2020-21 79304.00 342870.00 23.13

Table No :4.2. 3
 400000

350000

300000

250000

SUB –STANDARD ASSETS (Rs in

200000
GROSS NPAs
PERCENTAGE
150000

100000

50000

0
2017-18 2018-19 2019-20 2020-21

Graph No : 3

INTERPRETATION

In this graph the highest Sub-Standard assets are in the year 2021-20 is 79304.00and other one in
the year of 2019-20 is 58394.00 the both are highest in the sub-standard assets involving in bank.
The reduction in the percentage of Sub-Standard assets indicates less addition of fresh NPA. But,
another inference derived is in, more Sub-Standard assets slipped into doubtful and loss category
of assets
3.DOUBTFUL ASSETS RATIO

Doubtful assets are sticky loans where the recovery of both interest and installments is difficult.
“When adequate care or follow up is not done in upgrading the standard assets, they used to slip
down to doubtful assets. In case of doubtful assets, the immediate action to be taken by the bank
is to protect the securities offered, assets created both immovable as well as the collateral
securities”. The Doubtful Assets is calculated as:

Formula

DOUBTFUL ASSET= DOUBTFUL ASSETS

GROSS NPAs *100

YEAR DOUBTFUL ASSETS GROSS NPAs PERCENTAGE

(Rs in Millions) (Rs in Millions)
2017-18 15377.00 41102.00 37.41
2018-19 30838.00 60875.00 55.66
2019-20 101330.00 212805.00 46.61
2020-21 239420.00 342870.00 69.83
Table No : 4
 400000

350000

300000

250000

DOUBTFUL ASSETS
200000
GROSS NPAs
PERCENTAGE
150000

100000

50000

0
2017-18 2018-19 2019-20 2020-21

Graph No: 4

INTERPERATION

This shows the highest doubtful assets in the year 2019-2020and 2020-21 that is 101330.00 and
239420. But it is not well to the bank earnings so lowest in the year 2017-18 37.41is while
compared to 2020-21
4.LOSS ASSETS

“Loss Assets is considered uncollectible and of such little value that its continuance as a
bankable asset is not warranted, although there may be some salvage or recovery value”. It
usually defined as loans advanced by Banks/ financial institutions which are doubtful and have
been declared as not recoverable by the auditors of the bank or by central bank
auditor/inspectors.

GROSS NPA (%)

Gross NPA percentage denotes the percentage of advances which have turned into NPA as
against the total outstanding loan book. The ratio is calculated as

FORMULA: LOSS ASSESTS = LOSS ASSEST

GROSS NPAs *100

YEAR LOSS ASSETS (Rs GROSS NPAs(Rs in PERCENTAGE

in Millions) Millions )

2017-18 15141.00 41102.00 36.84

2018-19 13898.00 60875.00 22.83

2019-20 53081.00 212805.00 24.94

2020-21 24146.00 342870.00 7.04

Table No: 5
 Chart Title
400000

350000

300000

250000

200000

150000

100000

50000

0
2017-18 2018-19 2019-20 2020-21

LOSS ASSETS (Rs in Millions) GROSS NPAs(Rs in Millions ) PERCENTAGE

Graph No : 5

INTERPRETATION

In the above graph it is clearly shown that in the year 2019-20 53081.00 which are highest then
compared to that of previous years. It loss to the bank.
5.NET NPA (%)

Net NPA percentage denotes the proportion of advances which turned into NPA after adjusting
for the provisions already made by the bank / financial institution. The ratio is calculated as

FORMULA=

NET NPA

NET ADVANCES *100

COMPARATIVE NPAs RATIOS

YEAR GROSS NPA% NET NPA%

2017-18 1.43 0.46
2018-19 1.75 0.73
2019-20 5.42 2.26
2020-21 7.38 3.69

Table No : 6
 8

GROSS NPA%
4
NET NPA%
Series3
3

0
2017-18 2018-19 2019-20 2020-21

Graph No : 6

INTERPRETATION

In the data analysis represents from the above table the NPA ratio of 2017-18 to 2020-21 of Axis
Bank Ltd.,. NPA’s is increasing every year. This shows that Efficiency of the bank recovery
management and it needs to improve the efficiency and profitability of banks the NPA need to be
reduced and controlled
KEY PERFORMES RATIOS

1.Return on Capital Employed (ROCE)

Return on capital employed (ROCE) is a financial ratio that can be used to assess a

company's profitability and capital efficiency. In other words, this ratio can help to understand
how well a company is generating profits from its capital as it is put to use.

The ROCE ratio is one of several profitability ratios financial managers, stakeholders, and
pReturn on capital employed (ROCE) is a financial ratio that measures a company’s profitability
in terms of all of its capital.

Return on capital employed is similar to return on invested capital (ROIC).

Many companies may calculate the following key return ratios in their performance analysis:
return on equity (ROE), return on assets (ROA), return on invested capital (ROIC), and return on
capital employed.

Return on Capital Employed (ROCE) ratios

YEAR RATIOS
2021 2.70
2020 2.68
2019 2.47
2018 2.34
2017 3.05
Table No : 7
 ROCE RATIOS
2.8

2.7

2.6

2.5 RATIOS

2.4

2.3

2.2

2.1
2021 2020 2019 2018

Graph No : 7

INTERPERATION

In the year 2017 the ROCE was 3.05 it was deceaserd to 2.34 in 2018 and increase of 0.13 in the
year of 2019 ,the graph show the increase in return on capital employment 2020 and the in 2021 .
2.Current Account Savings Account

A current account savings account (CASA) is aimed at combining the features of savings and
checking accounts to entice customers to keep their money in the bank. It pays very low or no
interest on the current account and an above-average return on the savings portion. CASA is
most commonly used in West and Southeast Asia, though the CASA structure is available
globally.

Current Account Savings Accounts (CASA) are a type of non-term deposit account.

A CASA has a lower interest rate than term deposits, such as a certificate of deposit, and is thus
a cheaper source of funds for the financial institution.

A CASA combines the benefits of both a checking account and savings account, and it is
indicative of a competitive market in which banks need to offer new products to win over
customers.

The percentage of total bank deposits that are in a CASA is an important metric to determine the
profitability of a bank. The CASA ratio indicates how much of a bank’s total deposits are in both
current and savings accounts.

 The ratio can be calculated using the following formula:

CASA Ratio = CASA Deposits ÷ Total Deposits

YEAR RATIOS
2017 51.41
2018 53.75
2019 44.37
2020 41.19
2021 44.92

Table No : 8
 Chart Title
60

50

40

30

20

10

0
2017 2018 2019 2020 2021

RATIOS Column2 Column3

Graph No : 8

INTERPERATION

In the year 2017 the value of CASA was 51.41 there was a increase in 2018 the value was 53.75
again in 2019 and 2020 there was decrease of 9 to 11% (percent ) in the CASA and in the year
2021 there was a increase of 3.69% and the value was 44.92.
3.Net Profit Margin

Net Profit Margin (also known as “Profit Margin” or “Net Profit Margin Ratio”) is a financial
ratio used to calculate the percentage of profit a company produces from its total revenue. It
measures the amount of net profit a company obtains per dollar of revenue gained. The net profit
margin is equal to net profit (also known as net income) divided by total revenue, expressed as a
percentage

Formula

Net Profit margin = Net Profit  ⁄  Total revenue x 100

The typical profit margin ratio of a company can be different depending on which industry the
company is in. As a financial analyst , this is important in day-to-day financial analysis

The net profit margin ratio is used to describe a company’s ability to produce profit and to
consider several scenarios, such as an increase in expenses which is deemed ineffective. It is
used extensively in financial modeling and company valuation.

Net profit margin is a strong indicator of a firm’s overall success and is usually stated as a
percentage. However, keep in mind that a single number in a company report is rarely adequate
to point out overall company performance. An increase in revenue might translate to a loss if
followed by an increase in expenses. On the other hand, a decrease in revenue, followed by tight
control over expenses, might put the company further in profit.

Net Profit Margins ratios

YEAR RATIOS
2017 8.26
2018 0.60
2019 8.50
2020 2.59
2021 10.35
Table No : 9
 Chart Title
12

10

0
2017 2018 2019 2020 2021

RATIOS Column2 Series 3

Graph No : 9

INTERPERATION

In the year 2017 the value of the Net profit margin was 8.26 and there was huge decrease in 2018
as shown in the graph , in 2019 the NPM was 8.50and in 2020 there was a decrease 2.59 and
increase in 2021 and the value of NPM was 10.35.
4.Return On Asset

Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
ROA gives a manager, investor, or analyst an idea as to how efficient a company's management
is at using its assets to generate earnings

Return on assets (ROA) is an indicator of how well a company utilizes its assets in terms of
profitability.

ROA is best used when comparing similar companies or by comparing a company to its own
previous performance.

ROA does not take into account a company’s debt, while return on equity (ROE) does if a
company carries no debt, its shareholders' equity and its total assets will be the same and ROA
would equal ROE.

ROA is calculated by dividing a company’s net income by total assets. As a formula, it's

expressed as:

Return on Assets = Net Income

Total Assets

Return on Assets ratios

YEAR RATIOS
2017 0.61
2018 0.03
2019 0.58
2020 0.17
2021 0.66
Table No: 10
 Chart Title
0.7

0.6

0.5

0.4

0.3

0.2

0.1

0
2017 2018 2019 2020 2021

RATIOS Series 2 Series 3

Graph No : 10

INTERPERATION

In the year 2017 the value of ROA was 0.61 , there was a decrease in 2018 and the value was
0.03 then there was increase in2019 the value was 0.58 and then in 2020 the value was decreased
to 0.17 and in the year 2021 the value is increased to 0.66.
5.Net Interest Margin

Net interest margin (NIM) is a measurement comparing the net interest income a financial firm
generates from credit products like loans and mortgages, with the outgoing interest it pays
holders of savings accounts and certificates of deposit (CDs). Expressed as a percentage, the
NIM is a profitability indicator that approximates the likelihood of a bank or investment firm
thriving over the long haul. This metric helps prospective investors determine whether or not to
invest in a given financial services firm by providing visibility into the profitability of their
interest income versus their interest expenses

Multiple factors may affect a financial institution's net interest margin chief among them: supply
and demand. If there's a large demand for savings accounts compared to loans, net interest
margin decreases, as the bank is required to pay out more interest than it receives. Conversely, if
there's a higher demand in loans versus savings accounts, where more consumers are borrowing
than saving, a bank's net interest margin increases

Formula

Net Interest Margin= IR−IE

Average Earning Assets

IR= Investment Returns

IE= Interest Expenses

Net Interest Margin

YEAR RATIOS
2017 3.00
2018 2.69
2019 2.71
2020 2.75
2021 2.93
Table No : 11

Chart Title
3.1

2.9

2.8

2.7

2.6

2.5
2017 2018 2019 2020 2021

RATIOS Series 2 Column1

Graph No : 11

INTERPERATION

In the year 2017 the value of net interest margin was 3.00 and there was decrease in 2018 the
value was 2.69 ,in 2019 and 2020 there was increase in the net interest margin value as show in
the above graph and in the year 2021 also the value of a NPM was increased .
 CHAPTER - 5

FINDINGS, SUGGESSTIOONS AND CONCLUSION

5.1FINDINGS

 In the starting of the study we got known about NPAs like meaning,
classification ,measures

 T he percentage of gross and net NPA has been improved by the Axis bank

 This Gross NPAs and Net NPAs that Efficiency of the bank recovery management and it
needs to improve the efficiency and profitability of banks the NPA need to be reduced
and controlled.

 Though this research we deep understood about NPA concepts and compare OF NPA
position of NPA in Axis Bank

 In the study of NPAs we analysis of NPAs like Standard Asset Ratio,Sub-Standard Asset
Ratio, Doubtful Asset Ratio, Loss Asset Ratio

 In the begging of the study we got to know about Indian banking sector

 We got to know about Axis bank different types of services like loans, primary services
and SWOT Analysis .

 In the study we found about Key performes ratios

5.2SUGGESSTIONS

The bank must concentrate on right measure to identify the status of the various advances which
helps to reduce the NPAs at bank level

Thus Axis Bank being the private bank and one of the best banks in India should concentrate
much about Non Performing Asset and strictly follow the guidelines given by the Reserve Bank
of India.

5.3CONCLUSION

The project has undertaken has helped a lot in understanding the concept of “Non Performing
Asset management” in private Bank with special reference to Axis bank. Non Performing Asset
management is a key parameter which is playing a pivotal role in deciding the profit ratio of the
banks. The project work has certainly enriched the knowledge about the effective management of
NPA in banking sector.

BIBLIOGRAPHY

https://www.moneycontrol.com/india/stockpricequote/banks-private-sector/axisbank/AB16

https://www.ibef.org/industry/banking-india.aspx - :~:text=The%20Indian%20banking%20system
%20consists,in%20India%20increased%20to%20209%2C282.