A

SYNOPSIS REPORT
ON
A STUDY ON NON PERFORMING ASSETS
AT
AXIS BANK LIMITED
Submitted
By
BONAGIRI SPOORTHY
H.T.NO: 1303-20-672-057
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE
UPPAL
(Affiliated to Osmania University)
2020-2022

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 Aurora’s PG College (MCA), Uppal
Department of Management

SYNOPSIS

Title of the Project : A STUDY ON NON PERFORMING

ASSETS

Student Name : BONAGIRI SPOORTHY

Hall Ticket Number : 1303-20-672-057

Signature of the Student :

Signature of the Guide :

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 TABLE OF CONTENTS
S. No. CHAPTER Page No

1 INTRODUCTION 1

2 NEED FOR THE STUDY 2

3 OBJECTIVES OF THE STUDY 3

4 RESEARCH METHODOLOGY 4

5 LIMITATIONS OF THE STUDY 5

INTRODUCTION

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Banks are in the business of accepting deposits for the purpose of lending. They act as
financial intermediary between depositors and those who are in need of funds. Banks occupy
a pivotal place in the payment system for Government, business and households. Thus they
play a vital role in the economic and financial life of the country. They are, therefore
accountable to the Government, as well as to the public, who are keeping their funds. Banks
are using the deposits in lending and investments and here the primary role of Government
and Reserve Bank of India (RBI) is to limit the risk and loss to depositors and thus maintain
public confidence as well as prevent collapse of the banking system.
Banking was in existence in India from very earlier times. The writing of Manu and Kautilya
contained reference to the banking. But modern banking (i.e., banking on western lines)
started in India only from the beginning of the 19th century. The earliest commercial banks
were started in India by the employees of the East India Company. But, the organized
banking was active in India since the establishment of General Bank of India in 1786. After
independence, the Reserve Bank of India (RBI) was established as the central bank and in
1955, the Imperial Bank of India, the biggest bank at the time, was taken over by the
Government to form state-owned State Bank of India (SBI).
The Government nationalized 14 large banks in 1969 followed by another 6 banks in 1980.
This period saw enormous growth in the number of branches and the bank‟s branch network
became wide enough to reach the weakest section of the society in a vast country like India.
Non-Performing Assets (NPA):
The banking industry has undergone a sea change after the first phase of economic
liberalization in 1991 and hence credit management. While the primary function of banks is
to lend funds as loans to various sectors such as agriculture, industry, personal loans, housing
loans etc.,.
The banks have become very cautious in extending loans in recent times.
The reasons for mounting Non-Performing Assets (NPAs).
An NPA is defined as a loan asset, which has ceased to generate any income for a bank
whether in the form of interest or principal repayment. As per the prudential norms suggested
by the Reserve Bank of India (RBI), a bank cannot book interest on an NPA on accrual basis.
In other words, such interests can be booked only when it has been actually received.
Therefore, this has become what is called as a „critical performance area‟ of the banking
sector as the level of NPAs affects the profitability of a bank.
Therefore, an NPA account not only reduces profitability of banks by provisioning in the
profit and loss account, but their carrying cost is also increased which results in excess and

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avoidable management attention.
"NON- PERFORMING BANKS", instead steps should be taken to convert "NON -
PERFORMING ASSETS" into "NOW PERFORMING ASSETS".

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NEED FOR THE STUDY:
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 research explores an empirical approach to the analysis of Non-
Performing Assets (NPAs) with special reference to different banks. NPAs adversely affect
lending activity of banks as non-recovery of loan installments as also interest on loan
portfolio. Non -recovery of loans also hurts the profit ability of banks. The outcome of the
study would help the concerned more particularly the managers of banks to device
appropriate management strategies to have NPA within the manageable limit to keep the
performance of the banks in a healthier condition. To analyze and minimize the risk involved
in different sectors of NPA.

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OBJECTIVES OF THE STUDY:

1. To analyze trend in sector wise Non-Performing Assets (NPA) of AXIS bank.

2. To compare year wise and sector wise contributions towards NPA.
3. To examine the sector wise credit risk facing by AXIS bank.
4. The study is to examine and to take appropriate measures to be taken in reducing
the carrying cost through recovery and negotiated settlement or to write off.
5. To study nature and cause of credit risks facing by AXIS bank.

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RESEARCH METHODOLOGY
SOURCES FOR COLLECTION OF DATA
Primary Data:
Through discussions and enquiry of officials of the AXIS bank. Secondary Data:
Through analysis of annual reports, profit and loss account and balance sheet of bank and
referred related websites of AXIS bank.

TOOLS AND TECHNIQUES OF THE STUDY

1. NPA : Gross advances –repayments =gross npa*

2. Comparative Analysis: It is used to compare the non-performing assets in the bank.

PERIOD OF THE STUDY

Study is undertaken regarding the

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LIMITATIONS OF THE STUDY
The study is based on the primary data collected from the managers of banks by personal
enquiry in respect of credit risk regarding advances. In respect of NPA accounts and
amounts, the required information was gathered from secondary sources. In some banks, the
data on accounts and amount of NPA for some years were not available. Study has made
only on past five years data on NPA of the AXIS bank. Thus, the results of the study are
interpreted with the above limitation in view. The findings of the study cannot be applied to
other banks.