A

SUMMER TRAINING PROJECT REPORT

ON
NON-PERFORMING ASSETS (NPAs) MANAGEMENT
Jammu and Kashmir Bank Ltd.

Submitted by
AKHIL JASROTIA (22MBF10167)

In partial fulfilment of the requirement for the award of degree of

MASTER’S OF BUSINESS ADMINISTRATION
IN
BANKING AND FINANCIAL ENGINEERING

Chandigarh University
September 2023

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 BONAFIDE CERTIFICATE
Certified that the project report “NPA Management in Jammu & Kashmir Bank
Ltd.” is the Bonafide work of “AKHIL JASROTIA” who carried out the project
work under my/our supervision.

SIGNATURE SIGNATURE
Mr. Gagan Vibhu Alka Dhingra
(Head of Department) (Supervisor)

Submitted for the project viva-voce examination held on

INTERNAL EXAMINER EXTERNAL EXAMINER

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 ACKNOWLEDGEMENT

I would like to thank everyone who played an important role in the completion of my thesis:
My internship supervisor “Mr. Sunil Koul Assistant Branch Manager (Hall Incharge), J&K
Bank Branch, Kathua Patel Nagar” for their steadfast guidance, professional knowledge and
unwavering support throughout the internship period. Their understanding and guidance are
essential in the success of the project.

I am indebted to the entire team at J&K Bank, Patel Nagar, for affording me the opportunity to
immerse myself in a professional banking environment and for their willingness to share their
wealth of knowledge and experiences.

I would also thank my Institution and my faculty members without whom this project would
have been a distant reality.

Finally, I would like to thank my family and friends for their support, encouragement and
understanding throughout this journey. It must be acknowledged that the results of this project
were achieved through the joint efforts and support of these people and the opportunities
provided by J&K Bank.

Sincerely,

Akhil Jasrotia
UID: -22MBF10167

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 TABLE OF CONTENT

SERIAL NO. TOPIC PAGE NO.

1 INDEX 5

2 LIST OF FIGURES & TABLES 7

ABSTRACT 8

ABBREVIATIONS 9

5 INTRODUCTION 10

6 LITERATURE REVIEW 31

7 RESEARCH METHODOLOGY 35

8 FINANCIALS & DATA ANALYSIS 39

9 NON PERFORMING ASSETS 58

10 FINDINGS & SUGGESTIONS 71

11 CONCLUSION 75

11 BIBLEOGRAPHY 76

12 QUESTIONNAIRE 77

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 INDEX
CHAPTER 1. INTRODUCTION 10-30
1.1. Industry Overview 11
1.2. History of banking in India 13
1.3. Organizational Framework of the Banking System in India 14
1.4. SARFAESI act 19
1.5. Company overview 21
1.6. Brief profile – J&K Bank 23
1.7. Product & services of J&K Bank 27
CHAPTER 2. LITERATURE REVIEW 31-34
2.1. Review of literature 32
CHAPTER 3. RESEARCH METHDOLOGY 35-38
3.1. Source of Data Collection 36
3.2. Research Design 36
3.3. Research Objective 36
3.4. Need of the Study 37
3.5. Sampling Plan 37
3.6. Limitations of Study 37

CHAPTER 4. FINANCIALS & DATA ANALYSIS 39-57

4.1. Performance of FY2022-23 40
4.2. Financial features 40
4.3. Basis of Preparation of Financial Statements 42
4.4. Data analysis and Interpretations 45
4.5. Performance at glance 55
CHAPTER 5. NON-PERFORMING ASSETS 58-70
5.1. Definition 59
5.2. NPA concept & prudential form 60
5.3. Prudential Accounting norms 61
5.4. Comprehensive guidelines for Asset Classification & NPA Determination 63
5.5. Asset quality, NPAs and directed credit 65
5.6. Reasons for rise in NPAs of J&K bank ltd. 66

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5.7. Impact of NPAs on performance of banks 67
5.8. Methods & techniques used for controlling NPAs in J&K bank 69

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 LIST OF FIGURES & TABLES

Figures:
CHAPTER 1
1.1 Structure of Banking System in India 15
1.2 Roles of SARFAESI Act 20
1.3 Process of SARFAESI Act 21
1.4 J&K Bank Srinagar HQ 24
1.5 Deposit Accounts 27
1.6 Investment 27
1.7 Cards 28
1.8 Banking 28
1.9 IFSC Code 29
CHAPTER 4
4.1. Bar Graph NPA to Gross Advances Ratio 51
4.2. Line Chart NPA to Gross Advances Ratio 51
4.3. Line Chart Net NPA to Net Advance Ratio 52
4.4. Pie Chart Net NPA to Net Advance Ratio 53
4.5. Line Chart Dividend to Shareholder 54
4.6. Area Chart Dividend to Shareholder 54

Tables:
CHAPTER 4

4.1. Banks Historical Capital Position over 5 years 41

4.2. Standalone Balance Sheet of J&K Bank 42
4.3. Standalone Profit & Loss Account 43
4.4. Standalone Cash Flow Statement of J&K Bank 45
4.5. Liquidity coverage Ratio of J&K Bank 47
4.6. NSFR Disclosure 49
4.7. Deposits & Advances of J&K Bank 50
4.8. Gross NPA to Gross Advance Ratio 50
4.9. Net NPA to Net Advance Ratio .52
4.10. Dividend paid to shareholder from last seven years .53
4.11. Area & Business Units .56

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 ABSTRACT

The internship project titled "Non-Performing Asset (NPA) Management in Jammu & Kashmir
Bank”: aims to investigate and propose strategies to enhance the management of Non-
Performing Assets (NPAs) in Jammu & Kashmir Bank (J&K Bank). NPAs are a critical concern
for financial institutions, as they affect profitability, financial stability, and overall economic
growth. Therefore, this project is designed to address the specific challenges faced by J&K
Bank in managing NPAs efficiently. The internship project will involve a combination of
qualitative and quantitative research methods. The findings and recommendations from this
project are expected to assist J&K Bank in developing a more robust NPA management
framework, ultimately contributing to its financial stability and sustainable growth.
Additionally, the project's insights may have broader implications for the banking sector,
particularly in regions facing similar economic and demographic challenges.

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 ABBREVATIONS

IFSC: Indian Financial System Code

LCR: Liquidity Coverage Ratio
NSFR: Net Stable Funding Ratio
NPA: Non-Performing Asset
IFCI: Industrial Finance Corporation of India
EXIM: Export Import Bank of India
IPO: Initial Public Offer
URLBC: Union Regional Level Bankers Committee
CBDT: Central Board of Direct Taxes
PFMS: Public Financial Management System

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INTRODUCTION

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 CHAPTER 1
INTRODUCTION

1.1 INDUSTRY OVERVIEW

In the developing environment of the global financial sector, commercial banks are facing a
big cross-border challenge - the Specter of non-performing assets (NPAs). This tricky issue
has become a critical problem that threatens the viability and solvency of banks around the
world. NPAs, like silent competitors, damage the bank's core by disrupting credit operations,
where defaults in loan repayments and interest payments reduce the efficiency of the credit-
distribution machine and, in turn, reduce the bank's profitability.

As a result, banks burdened with high NPAs must bear additional financial burden, increase
their capital and make provisions and provisions to prevent loan losses. This provision is
financed by the proceeds of asset foreclosures, thereby increasing financial vulnerability.

Today, the presence of high levels of NPAs in the bank's loan portfolio is dangerous and
exposes it to potential failure. The consequences of this weakness are profound, with
domestic and global investors losing confidence in the banking system and risking economic
disaster.

Therefore, managing bad loans and reducing NPAs is not necessarily more important for
banks. In particular, global banks keep NPAs below 2% of their total portfolio, anything
above 5% is considered impaired. Due to increased competition and widespread decline,
banks must strive to keep NPAs below the 10% threshold, ensuring net income is necessary
for sustainability and growth.

However, the impact of NPAs is influenced by several factors, from their origin to a complex
network of internal and external forces. It falls on the Reserve Bank of India (RBI) to take
necessary measures to prevent NPAs.

The fate of NPAs in relation to the fate of commercial banks presents a complex scenario.
Functionally diverse and geographically wide, these banks have historically played an
important role in promoting the socio-economic development of our nation. Extending credit
to suit different borrowers and some of their needs is the core of their business. Bank loans

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are the main source of financing available to most customers, along with loans to banks
represent their most profitable assets. Income is adjusted for recurring credit risk from a
balanced mix of loan interest rates, fee income and strategic investments.

When a borrower turns a once-promised loan into a non-performing asset, the consequences
of credit risk are huge. Therefore, in today's banking environment, proper NPA management
and quick resolution are the most important.

However, the NPA extends the dark economy beyond the banking sector and overshadows the
wider economy. Any interruption in the flow of credit risks adverse results, stifling economic
growth and development. As a result, NPAs have become more of a public interest than
lenders concern, because extending credit for economic activities remains the main
responsibility of banking institutions.

Banks collect funds through new deposits, loans and processing funds from borrowers, which
form a significant part of their lending activities. Loans are not only encouraged, but also
essential for the efficient allocation of productive resources from the financial system to goals
that lead to economic growth. However, a loan is a credit risk that arises from the borrower's
failure without risk equity. Non-payment of loans, with accrued interest, significantly reduces
the bank's profits and creates a major bottleneck in the credit cycle. In recent times, NPA has
emerged as a persistent challenger to the bottom line of the banking industry in our country.
Although some corrective measures have been taken by the Government of India and the RBI
through banking reforms, the consequences of this growing threat continue to plague the
financial sector.

This widespread and pervasive virus has affected banking and financial institutions globally,
with nationalized banks bearing the brunt, followed by SBI Group and All India Financial
Institutions. This report embarks on a comprehensive exploration of the labyrinthine
challenges posed by NPAs, offers a guiding light through this complex corridor, and offers a
set of resolutions and mitigation strategies in an ever-evolving financial environment.

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1.2 HISTORY OF BANKING IN INDIA

Phase I: The Rise of Banking (1786-1948)

Trade in India took place in the 18th century. In 1786, the Reserve Bank of India was
established, symbolizing the birth of modern banking in the country. Recently, Hindustan
Bank and Bangladesh Bank joined hands to create the foundation of the financial sector that
will play an important role in the development of India.

The British East India Company founded the Bank of Bengal (1809), the Bank of Bombay
(1840) and the first bank, the Bank of Madras (1843). These banks were initially established
as independent institutions and merged in 1920 to form the Imperial Bank of India. However,
during this period the banking sector grew slowly and confidence in the company was
uncertain and sometimes failed.

In 1865, Allahabad bank, the first major Indian bank in India, was established. Years later, in
1894, the Lahore-based Punjab National Bank was established. Many banks were established
between 1906 and 1913, including Bank of India, Central Bank of India, Bank of Baroda,
Canara Bank, Bank of India and Bank of Mysore. The Reserve Bank of India came into
existence in 1935 and is regarded as the central bank of India.

Phase II: Nationalization Period (1949-1991)

Following India's independence, the government took significant steps to reform the financial
sector. In 1955, the Financial Supervision Law was enacted to supervise financial institutions
and ensure their efficiency. In 1955, the State Bank of India was established, laying the
foundation for further growth.
In 1959, SBI's branches were also nationalized and many banks were brought under state
control. But the turning point came in 1969, when Prime Minister Indira Gandhi announced
the nationalization of 14 major companies.
This courage earned the public trust and confidence in financial institutions, which have now
become a symbol of public trust. The second part of the country took place in 1980 and 80%
of the banking sector was nationalized.

Phase III: Modernization and Liberalization (1991-Present)

In the 1990s, the Indian financial industry ushered in a new era of liberalization and
technological advancement. A committee was formed under the leadership of M.

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Narasimham with the aim of liberalizing and reforming the banking system. With the entry of
foreign banks into the Indian market, the ATM network expanded rapidly, making it easier for
customers. Services like telemarketing and online marketing have changed the way business
is done.

It is changing today's financial institution and making it easy and efficient. The financial
system has also proven to be vulnerable to foreign trade due to flexible exchange rates, high
exchange rates and limited profitability.

Today, the Indian banking sector has a wide reach and operates even in the remotest parts of
the country. Combining tradition with modernity, the Indian banking system continues to
evolve and adapt to new challenges through technology and other factors. It continues to be the
pillar of India's growth and development.

1.3 ORGANIZATIONAL FRAMEWORK OF THE BANKING SYSTEM

IN INDIA

Pillars of the Indian Economy: A Comprehensive Overview of the Banking System

A country's banking system becomes an important channel for improving financial stability
and ensuring economic growth. Over the decades, India has played an important role in the
country's finances and developed and developed an extensive banking structure. This article
goes into the complex framework of the Indian banking system by explaining its various
components and functions.

I. Regulatory Authority:
The core of India's banking system is the Reserve Bank of India (RBI), which has the authority
to regulate and supervise the entire spectrum of financial institutions across the country. RBI's
critical role is to monitor and shape the trajectory of India's banking landscape.

II. Bank Classification:

The Indian banking sector can be divided into three main segments: scheduled banks,
unscheduled banks and development banks. Each segment has a different importance and role
in the Indian financial ecosystem.

STRUCTURE OF BANKING SYSTEM IN INDIA

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A. Scheduled Bank:
Scheduled banks are the most important institutions under the Reserve Bank of India Act, 1934.
Special privileges are granted to these institutions:

1. Access to RBI funds: Banks are scheduled to have the advantage of borrowing from RBI at
a bank rate that is crucial in facilitating their operations.

2. Clearing house: Being a scheduled bank automatically gives you membership in the clearing
house, simplifying your financial transactions.

B. Non-scheduled Bank:
In contrast, unscheduled banks include financial institutions that do not find a place in the
Second Schedule of the Reserve Bank of India Act, 1934. Although these banks are not small,
they are not eligible for regular loans from the RBI for regular banking. operation except in
emergency situations.

III. Scheduled Bank sub-Divisions:

Scheduled banks are further divided into two distinct categories which have a niche in the
Indian banking panorama.

A. Commercial Bank:
Commercial banks, which are an important part of scheduled banks, represent the most
important banking institutions that serve as the backbone of the Indian financial system. Their
main functions include mobilizing deposits and disbursement of loans across various
economic sectors, facilitating economic growth and stability.

B. Cooperative Bank:
Cooperative banks have a unique structure within the framework of scheduled banks,
characterized by a cooperative ownership model. These banks support financial inclusion and
local economic development by meeting the financial needs of specific communities or
regions.

IV. Development Bank:

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Along with commercial and cooperative banks, the Indian banking system also includes
development banks. This special agency is aimed at financing and developing sectors that are
important for the growth and development of the country. Development banks play an
important role in channeling funds to key sectors, developing infrastructure and promoting
the country's economic agenda.

STRUCTURE OF BANKING SYSTEM IN INDIA

https://www.indianbanking.blogspot.com Fig 1.1

The banking system in India is structured in a multi-tiered structure consisting of different

banks and financial institutions serving different functions and customer categories. The
structure of the banking system in India can be divided as :

1. Reserve Bank of India (RBI):

Role: The central bank in India is responsible for monitoring and supervising all banking
activities in the country. It formulates and implements monetary policy, issues currency and
maintains financial stability.

2. Scheduled banks:

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Banks are included in the Second Schedule of the RBI Act, 1934 and are eligible for loans and
concessions from the RBI. Scheduled banks can be classified into two types:

a. Commercial banks:
These banks are involved in banking with the general public and can further be divided into
several categories:

I. Public Sector Bank (PSB):

a. Ownership: Owned by Government of India.

b. Examples: State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda
(BOB) etc.
c. function: Offer a variety of banking services and play an important role in financial
inclusion.

II. Private Bank:

- Ownership: Privately owned or a private company.
- Example: ICICI Bank, HDFC Bank, Axis Bank, Kotak Mahindra Bank etc.
- Features: Focus on innovative, digital banking and personalized services to attract
customers.

III. Foreign Banks:

- Ownership: Located outside India with its subsidiary or subsidiary companies.
- Examples: Citibank, Standard Chartered Bank, HSBC, etc.
- Function: Serving multinational corporations, clean individuals and international
trade.

IV. Regional Rural Banks (RRBs):

- Ownership: sponsored by commercial banks and the government.

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 - Example: Uttar Pradesh Grameen Bank of Baroda, Karnataka Vikas Grameen Bank
etc.
- Functions: Specialization in rural banking and rural financial inclusion.

b. Cooperative Bank:
- These banks are owned and operated by their members and can be further divided into:

• Rural Cooperative Bank:

o Example: State Cooperative Bank of Kerala, State Cooperative Bank of Maharashtra, State
Cooperative Bank of Rajasthan etc.
o Functions: Focus on rural areas, agriculture and rural development.

• ii. Urban Cooperative Bank:

o Example: Saraswat Cooperative Bank, Shamrao Vital Cooperative Bank, Maharashtra
Cooperative Bank (PMC Bank) etc.
o Functions: Operating in urban and semi-urban areas, providing banking services to residents
and businesses.

3. Non scheduled Bank

- Banks that are not included in the second schedule of the RBI Act, 1934 and do not enjoy
the same privileges as scheduled banks. Unscheduled banks are usually microfinance
institutions, moneylenders and credit cooperatives.

4. Development Bank:
- These financial institutions provide financing and long-term support for various sectors of
the economy. Notable development banks in India include:

a. Industrial Finance Corporation of India (IFCI):

- Function: Providing long-term finance and loans to industrial projects with a focus on
infrastructure development and production.

b. Industrial Development Bank of India (IDBI):

- Functions: Offers a variety of banking and financial services including project financing,
capital lending and corporate banking.
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 c. Export-Import Bank of India (EXIM):
- Function: Facilitates international trade by providing financial assistance to Indian
exporters and importers.

d. Small Industries Development Bank of India (SIDBI):

- Function: Focus on the development and financing of small scale industries and micro,
small and medium enterprises (UMKM).

e. National Bank for Rural and Rural Development (NABARD):

- Function: Providing credit and financial support for agriculture and rural development,
contributing to agricultural development and rural welfare.

1.4 SARFAESI Act.

The SARFAESI Act for Securitization and Reconstruction of Financial Assets and
Enforcement of Security Interest is an Indian law enacted in 2002. It allows banks and financial
institutions to recover non-performing assets (NPAs) by enforcing security interests. it was
made for their benefit. Some of the key features of the SARFAESI Act are:
1. Definition of Non-Performing Assets (SPA): The SARFAESI Act provides a precise
definition of NPAs where the borrower has defaulted on interest and/or repayments over a
period of time.
2. Powers for Banks and Financial Institutions: One of the main objectives of the
SARFAESI Act is to empower banks and financial institutions (secured creditors) to control
the interest on the security or guarantee provided by the borrower in case of default. Give
creditors secure ownership of the property without the need for court intervention.
3. Notice Requirement: Before taking any action under the SARFAESI ACT, the secured
creditor must issue a notice to the creditor demanding recovery of outstanding dues. This notice
must specify the amount due and give the borrower 60 days to pay. must pay the debt.
4. Right of appeal: Borrowers have the right to appeal against the actions of the secured
creditor under the SARFAESI Act. They can approach the Debt Recovery Tribunal (DRT), a
judicial body set up to resolve debt recovery disputes. If the borrower is not satisfied with the
decision of the DRT, they can further approach the high court such as the High Court and the
Supreme Court.
5. Asset Recovery Company (ARC): The SARFAESI Act facilitates the formation of Asset
Recovery Company (ARC). ARCs play an important role in the resolution of NPAs by

19
acquiring these assets from banks and financial institutions. ARCs try to recover NPAs through
various means, including restructuring, selling or merging distressed assets.
6. Central Register: The Act mandates the establishment of a Central Register to maintain
records of transactions related to safe assets. This list helps prevent fraud and multiple
financing of the same property.

The SARFAESI Act has enabled banks to effectively deal with non-performing assets and
reduce the burden of bad loans on their balance sheets. However, the loan raised concerns about
borrowers' rights because it allowed banks to acquire property without a court order. Balancing
the interests of both borrowers and lenders remains a major challenge in implementing the
SARFAESI act.

Fig1.2 https://cleartax.in/s/sarfaesi-act-2002

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 PROCESS TO BE FOLLOWED:

Fig1.3

https://Knovalt.com

1.5 COMPANY OVERVIEW – J&K BANK

History of Jammu and Kashmir Bank, popularly known as J&K Bank, is an exciting journey t
hat reveals its unique history and evolution to become one of India's leading financial instituti
ons. Here is a brief summary of its important history:

1938 - Establishment: Bank of Jammu and Kashmir was established on 1 October 1938 by
Maharaja Hari Singh, Maharaja of Jammu and Kashmir. It started as a regional bank with the
primary goal of promoting business and financial inclusion in the state.

1947_Independence Period: The banking system changed after India gained independence i

21
n 1947 and Jammu and Kashmir joined India. The focus has changed from a regional bank to
a more general public bank.

1956- Establishment: In 1956, the bank was established under the Companies Act, 1956 and
became a scheduled bank. This change in circumstances led him to expand his work beyond
the borders of Jammu and Kashmir.

1980s - Technological Advances: In the 1980s, J&K Bank adopted technology including co
mputerization and this led to significant improvements in operations and customer service.
1990s - Expansion: In the 1990s, the bank experienced expansion in terms of both its branch
network and the services it offered. It started offering modern banking services and products s
uitable for different customers.

2000s - IPO: In 1998, Jammu and Kashmir Bank conducted its initial public offering (IPO) a
nd was listed on the stock exchange. This is an important moment in its history and allows it t
o tap into the capital market for growth.

Recent years: Johnson & Johnson Bank has continued to develop and diversify its business in
recent years. It uses technology to provide convenient services to customers and expand its f
ootprint in India. Today, Jammu and Kashmir Bank is a symbol of financial stability and deve
lopment not only in the Union Territory of Jammu and Kashmir but also in India. It is also av
ailable all over India. Its evolution from a regional bank to a modern, middle-
class financial institution reflects its determination and strength to meet the banking needs of
many countries.

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1.6 BRIEF PROFILE- J&K BANK

Bank of Jammu and Kashmir (J&K Bank) is a scheduled commercial bank and one of the old
est banks in India, established in 1938. The bank is listed on NSE and BSE and is headquarter
ed in Srinagar. The bank is one of the largest banks in the Union Territory of Jammu, Kashmi
r and Ladakh and has been appointed by the Reserve Bank of India as the special representati
ve of the Government of Jammu and Kashmir to handle banking affairs for Kashmir and Lad
akh. J&K Bank caters to the business needs of a variety of customers, including commercial
bank employees, government, semigovernment and regulatory bodies, farmers, intellectuals,
civil society and consumers. The bank also offers a wide range of loan products such as housi
ng loans, personal loans, education loans, agricultural loans, business loans and consumer loa
ns, as well as special financial products tailored to the needs of different customers.

The Government of Jammu, Kashmir and Ladakh holds a majority stake of 63.41% in the ban
k as on June 30, 2023. As of June 30, 2023, the bank has 996 branches and 1,414 ATMs sprea
d across 18 states and 4 Union Territories across the country. Of the 996 branches, 831 are op
erating in J&K UT, 37 in Ladakh UT and 128 outside J&K and Ladakh UT. Apart from this, t
he bank has 84 small branches known as Easy Banking Units (EBUs) in J&K and UT of Lada
kh.

J&K Bank has a unique role in Jammu and Kashmir with its strong marketing and dedicated r
epresentatives. Government. The Bank collects taxes for the central government in the Union
Territories of J&K and Ladakh on behalf of the Central Excise and Customs Board and in coll
aboration with the Central Government of J&K and Ladakh on various policy-
related initiatives. for youth work, women empowerment and others. With a noticeable
number of these branches operating within J&K and Ladakh, Jammu & Kashmir Bank stands
as a backbone for the residing communities while also providing its other services beyond
these regions.

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 Fig.1.4

The Main Differentiation

To acquire 61.60% banking business in UT and 54.92% majority stake in UT of Ladakh by
June 30, 2023.
- Appointed as RBI representative to conduct banking business for Government of J&K and
Ladakh UTs.
- Authorization to collect Central Tax for CBDT.
- Nodal Bank for PFMS in J&K and Ladakh UT.
- Advisor to the Union Regional Level Bankers Committee (UTLBC) in J&K UT.
- To be head of bank in 12 districts of J&K.
- Unique and competitive position of UT in J&K and Ladakh due to market power.
1.98 Crore (Fixed Deposits and Advances Pan India) account base is greater by June 30,
2023.

MISSION AND VISION OF J&K BANK

MISSION:
To gain a strong footprint in geography and emerge as a prominent national brand in the
financial sector.
Designating the Bank as the 'Bank of Choice' for its customer focus, operational excellence
and high integrity for one and all stakeholders.

24
Develop our digital and physical banking channels to become the best financial intermediary;
Pursuing customer centricity through service excellence, integrity and transparency, a
comprehensive range of products and innovative services tailored to customer needs.
To be a lean, adaptive and efficient banking organization focused on sustainable growth,
profitability and value creation.
Adopt the best standards of corporate governance, business ethics and risk management.
Improving financial inclusion as a business proposition to tap the potential at the bottom of
the pyramid
J&K Bank caters to the banking requirements of various customer segments including
government employees, semi-government and autonomous organizations, farmers, artisans,
NGOs and corporate customers. The Bank also offers a wide range of retail credit products
including home, personal, education and car loans, agricultural loans, commercial loans,
several unique financial products to suit the needs of the people of Jammu and Kashmir.

Vision:
“Pioneering the economic and social transformation “.
“To become a committed partner in fostering economic and social transformation across the
country through a deep commitment to value creation for all our stakeholders, while continuing
to build on our historic business relationship with Jammu & Kashmir and Ladakh. Besides, the
Bank operates on the principle of 'socially empowering banking' and endeavours to deliver
innovative financial solutions to all segments of the society which include household, small
and medium enterprises etc.”

MAJOR AWARDS AND RECOGNITIONS

❖ First company in India to obtain PCIDSS V4 certification.

❖ CASA India emerged as the best performer of 2023 (1st in the Small Banks
category) at the ICC Emerging Asia Banking Conference and Awards 2022 organized
by the Indian Chamber of Commerce in Goa on July 8.
❖ 'Gold Award' in the Innovation category at the Infosys Finacle Innovation Awards
2023.
❖ Pradhan Mantri Awas Yojana (City) - Various innovative measures for top lenders
by Credit Linked Subsidy Scheme (CLSS).
❖ Won the Outstanding Performance Award in Promotion of Digital Payments at the

Digital Payments Utsav organized by the Ministry of Electronics and Information

Technology, Government of India, in New Delhi.

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 ❖ Recognized as the Best Company for Micro, Small and Medium Enterprises and
Medium Enterprises (CIMSME) by the Indian Chamber of Commerce for
Micro, Small and Medium Enterprises. He was awarded the MSME Banking
Excellence Award. ISO 27001:2013 certification for compliance with best business
standards for privacy and security protocols.
❖ 2022 CSO 100 Awards
❖ 2022 Access and Identity Management 2020-21 Fiscal Year Merit and Customer
Assurance Special Cyber Security Award.

Awards and Certification Received by the Bank During FY2021-22

J&K Bank has a glorious history of over eight decades and has won many awards and
accolades. Over the years the bank has received many awards in various categories. The bank
surpassed its competitors and ranked at the top of the category in the 2021-22 financial year.

'Best Digital Financial Access Initiative' Award

J&K Bank won the 'Best Digital Financial Access Initiative' Award at the Indian Banking
Association 17th Annual Banking Technology Conference and Awards 2020-21.

'Best IT Risk and Cybersecurity Programme' Award

J&K Bank was awarded as 'Best IT Risk and Cybersecurity Programme' at the 17th Annual
Business Technology Conference.

Awards: 2020 Second Place in Indian Banking Association Cyber Security Initiative Award
Small Banks Category -21.

Digi-Dhan Awards 'Utkarsh Puraskar' 2020-21

J&K Bank received Digi-Dhan Award 'Utkarsh Puraskar' 2020-21' for ranking second in digital
payment percentage in the United States and in the Communication, Electronics and
Information Technology category in the Micro Banking category i and Railways (GoI) Minister
Ashwini Vaishnav.

“Khadi India Awards” - Pan India Category

J&K Bank was recognized as 4th in Khadi India Awards by Khadi Village Industries
Commission (KVIC), Mumbai MKM (GoI) for the implementation of Prime Minister's

26
Employment Program (PMEGP). country in the 2020-21 financial year. Khadi India Awards -
North India Category J&K Bank has been selected as the first runner-up in the Khadi India
Awards by the Ministry of Micro, Small and Medium Enterprises (GoI) for its performance in
the implementation of the Prime Minister's Employment Program (PMEGP) in North India.
2020-21.

“National SHG Bank Relations Award”

J&K Bank has been awarded the national award for Excellence in Self Help Groups (SHGs)
Banking for the year 2020-2011 by the Ministry of Rural Development (GoI). ISO 27001:2013
Certificate J&K Bank received the ISO 27001:2013 certificate from the London-based
accreditation body EUROLAB for meeting the industry's best standards in privacy and
security.

1.7 PRODUCT AND SERVICES PROVIDED BY J & K BANK

Fig1.5

Fig.1.6

27
Fig1.7

Fig1.8

28
 Fig1.9

https://www.paisabazaar.com/jammu-kashmir-bank/

LOAN FACILITIES GIVEN BY THE BANK

The different types of loans provided by the bank to its customers as per their requirement
are:
1.Educational Loan

2. House Loan

3. Car Loan

4. Consumer Loan

5. Dastkar Finance Scheme

6. Craft Development Scheme

7. Khatamband Finance Scheme

8. Roshni Financing Scheme

Personal Loan Scheme:

29
In addition to above products JK bank also extend "Personal Loan Facility" for general
public, which covers the following segments.

1. Housing Loan Scheme.

2. Consumption Loan Scheme.
3. Car Loan Scheme.
4. Education Loan Scheme.
5. Consumer Loan Scheme.
6. Loan for financing of School buses.

30
LITERATURE REVIEW

31
 CHAPTER 2
LITERATURE REVIEW

2.1 Review of Literature

M. Karunakar et.al (2008), learn important aspects of structure and process to make the entire
business strong and competitive. In business and finance, the problem of non-performing assets
(NPA) and liability conflicts, losses and reduced profits are based on different risks in business
processes. In addition to capital for risky assets of public financial institutions, credit risk
management and measures to control the risk of non-performing assets are also discussed. The
problem of non-performing assets can only be solved permanently by establishing a correct
credit assessment and risk management process. In the loan consolidation business, it is best to
avoid problem assets by creating a meticulous and appropriate financial evaluation.

Nelson M. Waweru et.al (2009), Following a study showing that many financial
institutions in Kenya have failed due to non-performing loans since 1986, this study examines
the causes of non-performing loans, the actions taken by bank managers to alleviate the
problem, and where these actions were taken. . Using a sample of 30 executives from ten top
banks, the study found that the country's economy is considered the most important external
factor. It is considered a customer-specific requirement that the customer not disclose his or
her information during the loan application. The study also found that the lack of debt collection
restrictions was considered the main factor contributing to Kenya's NPL problem, especially
in banking.

Meenakshi Rajeev & H P Mahesh (2010), NPAs are at the root of the global
financial crisis we have seen recently. The world is still trying to recover from the crisis. After
the independence of India's financial sector, the problem of non-performing assets received
widespread attention. Accounting standards have been revised and procedures to reduce non-
performing loans have been implemented. However, our interviews with banks indicate that
this decline is mainly due to awareness of the problem of non-performing loans at the bank
level (see Rajeev and Mahesh, 2007). In fact, NPAs in core activities continue to be higher than
in non-core activities. Among the main sectors, SSI's performance is the worst. However, even
with this activity, a decrease in NPLs was observed over time. Will banks be able to avoid
problem loans while reducing bad loans? In this context, the self-help group model can be used
in some sectors to help the poor obtain loans and guarantee bank repayments.

Ashly Lynn Joseph (2014), A comprehensive review of non-performing assets (NPAs)

of public sector banks and private sector banks has been carried out. The findings reveal important
differences between the two types of banks. There is a higher level of NPAs in public sector banks,

32
especially subprime and non-performing assets. This suggests that public companies face significant
challenges in managing and managing their assets effectively. In comparison, private banks performed
well in managing the majority of assets, indicating better management of their assets. These findings
highlight the importance of NPA management strategies in public sector banks as well as the
effectiveness of private sector banks. Recommendations to reduce non-performing assets (NPA) of
banks include various laws and strategies. First of all, it is advisable to establish Trial and Appellate
Tribunals (DRTs) to resolve NPA cases, but their current numbers may not be sufficient to resolve this
problem. Secondly, the Securitization Act of 2002 came into effect, which allowed banks to notify
defaulters, seize assets and replace management to recover debt. Lok Adalat are recommended for
recovery of small loans, especially NPAs up to Rs. 5 lakh provides an alternative to lengthy court
proceedings. Relevant decisions advocated an increase below Rs. 100 million to provide a simplified
process for NPA recovery. Additionally, credit bureaus are recommended to keep a comprehensive
database available to all lenders to help prevent loan defaults. Finally, corporate governance plays an
important role in reducing NPA risk, and recommendations are constantly made to improve the
profitability of the banking sector in credit management and NPA prevention. This integrated strategy
offers a way to deal with the NPA problem in the Indian banking sector.

Dr. Ujjwal M. Mishra and Jayant R Pawaskar (2017), In the study on Non-
Performing Assets (NPAs) in the banking sector, several key findings have emerged. The Net
NPA ratio exhibited fluctuations, initially decreasing from 0.84% in 2011-12 to 0.52% in 2012-
13 but then surging to 6.35% in 2015-16. This suggests that the bank managed to make
adequate provisions against NPAs initially but faced challenges in subsequent years. The Total
Provisions Ratio indicated that the bank did not allocate sufficient resources to provisions for
gross NPAs, with the ratio declining from 62.39% in 2012-13 to 31.45% in 2015-16. The
Problem Assets Ratio displayed a fluctuating trend, signaling that the management might not
have given enough attention to managing the proportion of Gross NPAs concerning total assets.
Depositor's Safety Ratio remained reasonably stable over five years, indicating that depositors'
funds were relatively secure. However, the Shareholder's Risk Ratio increased significantly to
77.75% in 2015-16, suggesting potential risks to shareholders' funds due to insufficient
provisions against NPAs. The Sub-Standard Assets Ratio and Doubtful Assets Ratio fluctuated
over the study period, underscoring the need to reduce doubtful assets and loss assets while
increasing sub-standard assets. Lastly, the Loss Assets Ratio indicated that the bank might face
higher losses in NPA recovery, especially in 2014-15 when it reached 16.44%. Addressing these
findings is crucial for the bank's financial health, emphasizing the need for proactive NPA
management strategies and adherence to regulatory guidelines. The study underscores the
importance of timely provisions, risk management, and legal support in handling NPAs
effectively, safeguarding both depositor and shareholder interests. The banking sector must be
aware of these challenges and take appropriate measures to resolve them and ensure long-term
stability and strength.

Baljinder Kaur (May2023), Examine the fundamental problem of non-

performing assets (NPA) in the banking industry. This study discusses the changes in NPAs and
compares them over the years, highlighting the importance of ensuring good practices and its

33
impact on the health of banks. Kaul's work highlights the critical role of law enforcement and
the need for timely intervention in the collection of non-performing loans. By delving into these
key concepts, it provides insights into the challenges banks face in managing non-performing
assets and highlights the importance of taking significant steps to ensure the stability and
stability of the economy.

Chittaranjan Das (2017), In this study, we provide important insights into the
non-performing loan (NPA) problem in India's financial sector. The findings highlight the
ongoing problem that NPAs pose for banks and the broader Indian economy. Considering that
Indian banks are dependent on interest income from loans, a large amount of money is locked
in non-performing assets, which directly affects the benefits of banks. The study revealed that
the ratio of total non-performing assets to total advances in public banking decreased until
2008. -An increase was seen after the 2009 reform and then from 2009-2010 to 2014-2015.
Similarly, the net NPA ratio has also changed, falling only in March 2009, but has reached
around 2.9% in recent years. Despite the improvement in these ratios, the reality of non-
performing assets (both gross and net) of India's public sector banks remains significant.
Therefore, the banking sector urgently needs to adopt a detailed NPL management and reform
strategy to solve this difficult problem.

Abhijit Sinha (2016), A comprehensive study has been conducted highlighting

the important role of the Indian financial system. Although the public has control over assets
and the economy, the economy is increasingly suffering due to non-performing assets (NPAs)
or bad loans. Sinha's research shows that overall negative and distressed assets in the economy
were particularly strong after the onset of the 2007 financial crisis. This pattern shows that
large financial institutions are geared towards sensitive businesses, especially the real estate
sector, which is hurt by failure and loan repayment. Moreover, these sectors have significantly
contributed to the NPA crisis, with more than 50% of the total NPAs coming from these sectors.
While asset recovery companies (ARCs) have emerged as key players in acquiring non-
performing loans at affordable prices, their profits have been hampered by rising asset prices,
drawdowns and problems in identifying the right property. The long-term success of banks'
stressed asset management remains uncertain as banks and regulatory authorities employ
strategies to address this critical issue.

34
 RESEARCH
METHODOLOGY

35
 CHAPTER 3
RESEARCH METHODOLOGY

The research methodology section deal with the objective of the study, the hypothesis which
have been designed keeping in mind the objective, sources of data, nature of research design,
tool for data collection. Research refers to search knowledge. One can also define research as
a scientific and Systematic search for pertinent information on a specific topic. It is an art of
scientific investigation.

3.1 SOURCE OF DATA COLLECTION

Primary Data Collection: The primary data are collected through survey method. A survey
was conducted among the people by the aid of well-structured questionnaire.
Secondary Data Collection: In this study the secondary data is collected from the following.
Sources:
Primary Source:
• Discussion with public and official person.
• Personal Interviews
Secondary Source:
• Company’s website
• Reports of company
• Books on marketing
• Pamphlets

3.2 RESEARCH DESIGN

This study adopts an exploratory research approach, aimed at gaining fresh insights into the
phenomenon under investigation.

3.3 RESEARCH OBJECTIVE

A prestigious Indian banking company is currently facing a major problem due to non-
performing assets (NPAs). While some banks control NPAs, others struggle to manage these
levels, leading to various problems. There are many reasons for equipment failure and its
negative impact on bank profits is obvious. Of particular interest in this study is the role of the
Debt Recovery Tribunal (DRT), a judge responsible for rescuing defaulting customers on

36
behalf of the institution's bank. Keeping this background in mind, this study presents the
following objectives:
1. Examine the impact of equipment failure on the banking industry.
2. Assess the status of non-performing assets in JK Bank Ltd
3. Check the circumstances that led to assets being classified as NPA.
4. Check NPA Coverage of JK Bank Ltd.

3.4 NEED OF THE STUDY

NPAs pose a threat to the banking sector as they fail to generate revenue for banks. Non-
performing assets do not generate income, but use income from other assets to pay interest to
the owners of those assets. This affects the return on equity and return on assets, which in turn
affects the overall profitability of the bank. The impact of non-performing assets on financial
institutions is serious and includes:
- Decline in financial performance.
- Low credit ability.
- Member's value erosion.
- Price increases.
- Risk of legal penalties and reputational damage.

According to these effects, a comprehensive study on device malfunction is required. These

studies help identify the reasons behind NPAs, provide insight into the conversion of NPA
accounts into non-performing assets (PAs), and prevent other accounts from becoming NPAs.
Understanding why an account is disabled is critical to implementing strategies to recover the
account and reduce future risks. Therefore, this study lays an important foundation for solving
the complex problem of equipment failure in the banking industry.

3.5 SAMPLING PLAN

The sampling plan in this project is as follows:
Population: The customers of the bank.
Sampling unit: Any individual residing in district Kathua of J&K state.
Sample size: 100
Sampling procedure: convenience sampling

3.6 LIMITATIONS OF THE STUDY

37
Every research suffers from one or the other limitation. The limitations from which
my study suffered are:
➢ Time allowed for the study was short. This limitation narrowed the scope of the study.
➢ Political instability in the region prevented to conduct the research in the manner in
which it could have been conducted.
➢ Negative responses from some of the respondents made it difficult to interpret the data
easily.
➢ The survey is limited to district Kathua only. So the respondents were of this district
only. This limitation may have brought biasness in the study.
➢ Some of the ambiguous replies which I omitted by taking them as unnecessary could
generate wrong results.

38
FINANCIALS & DATA
ANALYSIS

39
 CHAPTER 4
FINANCIALS & DATA ANALYSIS

4.1 PERFORMANCE OF FY2021-22

J&K Bank could register growth in all its business segments in FY23, in line with the
increase in economic activity. The bank's income increased by 16%, accounting for the net
income of 100%. in 2020 is 501.56 Euros. The Bank's net interest income was 6% of Rs.
975.50. Cost of debt, Return on Assets, and return on equity increased significantly by 2023
compared to 2022. J&K Bank continues to improve asset quality with a focus on recovery.
Meanwhile, J-k Bank has registered more than 6% growth in deposit to CASA ratio till
March 2022, making it among the best in the industry till March 2022. Your bank's growth
increased with retail growth of 11 percent - above the industry average. Loans to the primary
sector rose by 9% during the year, while the corporate sector recorded a growth of 4%, driven
by the bank's decision to concentrate lending mainly to the retail sector and only to medium-
sized companies. Your bank's investment portfolio increased by 10% to reach Rs 0.33 crore
with inward investment by 2022. Investment returns are consistent with the interest rate
scenario and have come down from 6.25% to 5.65% for 2021.
Further, Bank's capital increased due to new investments by J&K government as well as
employee share purchase scheme (ESPS) and capital adequacy ratio (CAR) increased by
13.23%. March 2021.
4.2 FINANCIAL FEATURES:
Profitability: The bank has grown significantly with a net income of $1,000,000. 501.56
Crore, a growth of 16% over the previous financial year.
Net Interest Income: Our Net Interest Income also experienced growth and reached Rs.
975.50, representing a growth of 6%.
Credit quality: In particular, the cost of borrowing has decreased significantly, which has led
to an increase in return on assets (ROA) and return on equity (ROE) compared to 2013.
Business Segment Deposits: The Bank reported a significant 6% increase in deposits in FY
2021-22 and its CASA (Current Account and Savings) stood at 56.85% in March 2022, one
of the best in the industry.
Advances: The bank's earnings posted positive growth with retail sales growth of 11 percent,
in line with industry standards. However, the corporate sector decreased by 4%, reflecting our
strategic focus on the retail industry and mid-sized corporations.
Investment portfolio: The bank's investment portfolio grew by 10% to 0.33 million by 2022,
including all domestic investments. Return on investment decreased in line with interest rates,
from 6.25% to 5.65% for 2012. Capital strength:

40
Capital Infusion: Our bank's capital base has been increased through investment by the J&K
Government, as well as through the Employee Share Purchase Scheme (ESPS) and revenue
dilution.
Capital Adequacy Ratio (CAR): Our capital adequacy ratio has increased to 13.23%, which
is an increase of 123 points in March 2021, indicating improved financial stability.
Tier I Capital: Tier I capital also increased to 11.73% in March 2022, compared to 10.28%
in the previous year, reflecting prudent planning. In conclusion, our bank's performance
through 2022 is distinguished by growth, profitability and strengthening the capital position.
We are committed to improving asset quality, focusing on recovery and continuing positive
growth in the coming years.
Banks historical capital position over 5 years

Table 4.1

https://www.jkbank.com/pdfs/annrep/Final%20Annual%20Report%20(2021-22

41
 4.3 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The accompanying financial statements are prepared on historical cost basis,
except as otherwise stated, following the “Going Concern” concept and conform
to the Generally Accepted Accounting Principles (GAAP) in India, applicable
statutory provisions and regulatory norms prescribed by the Reserve Bank of
India (RBI), statutory guidelines of the Banking Regulation Act, 1949, applicable
mandatory Accounting Standards (AS)/Guidance Notes/pronouncements issued by
the Institute of Chartered Accountants of India (ICAI) and practices prevailing in
the banking industry in India.
The financial statements have been prepared in accordance with requirements
under the Third Schedule of the Banking Regulation Act, 1949.

Standalone Balance Sheet of J&K Bank

As at As at
CAPITAL AND LIABILITIES Schedule 31.03.2023 31.03.2022
` ‘000’ Omitted ` ‘000’ Omitted
Capital 1 1,031,623 933,030
Share Application Money - 935,000
Reserves and Surplus 2 98,400,757 79,203,630
Deposits 3 1,220,377,383 1,147,103,799
Borrowings 4 28,923,058 23,708,173
Other Liabilities and Provisions 5 110,889,767 54,140,492

TOTAL 1,459,622,588 1,306,024,124

ASSETS
Cash and Balance with Reserve Bank of India 6 77,940,577 77,502,028
Balance with Banks & Money at Call & Short Notice 7 10,846,044 10,348,444
Investments 8 348,291,521 338,349,883
Advances 9 822,854,513 704,006,750
Fixed Assets 10 22,715,388 19,536,800
Other Assets 11 176,974,545 156,280,219
TOTAL 1,459,622,588 1,306,024,124
Contingent Liabilities 12 52,337,681 55,249,390
Bills for Collection 17,054,071 15,380,639
Principal Accounting Policies 17
Notes on Accounts 18

The schedules referred to above form an integral part of the Balance Sheet.
as at 31st March, 2023 Table 4.2
www.jkbank.com/pdfs/annrep/Annual_report23.pdf

42
 Standalone Profit & Loss Account
for the year ended at 31st March, 2023

YEAR YEAR
SCHEDUL ENDED ENDED
E 31.03.2023 31.03.2022
` ‘000’ Omitted ` ‘000’ Omitted
I INCOME
Interest Earned 13 93,551,062 80,134,754
Other Income 14 7,568,107 7,440,074
TOTAL 101,119,169 87,574,828
II EXPENDITURE
Interest Expended 15 46,098,253 41,022,458
Operating Expenses 16 36,436,014 35,927,774
Provisions and Contingencies 6,611,102 5,608,975
TOTAL 89,145,369 82,559,207
III NET PROFIT / (LOSS) 11,973,800 5,015,621
TOTAL 101,119,169 87,574,828
IV APPROPRIATIONS
TRANSFERED TO
i) Statutory Reserve 2,993,450 1,253,905
ii) Capital Reserve - 335,145
iii) Revenue and Other Reserve 8,464,610 3,426,571
iv) Investment Fluctuation Reserve - -
v) Special Reserve - -
vi) Proposed Dividend 515,740 -
TOTAL 11,973,800 5,015,621
Principal Accounting Policies 17
Notes on Accounts 18
Earnings per Share (in Rs.) (Basic/Diluted) 12.43 6.04
Table 4.3
www.jkbank.com/pdfs/annrep/Annual_report23.pdf

43
 Standalone Cash Flow Statement of J&K Bank
YEAR ENDED YEAR ENDED
31.03.2023 31.03.2022
(Audited) (Audited)
` '000' `'000' Omitted
Omitted

A CASH FLOW FROM OPERATING ACTIVITIES (42,05,132) (1,56,84,608)

B CASH FLOW FROM INVESTING ACTIV ITIES (12,34,655) (8,51,442)
C CASH FLOW FROM FINANCING ACTIVITIES 63,75,936 94,10,594
NET CHANGE IN CASH AND CASH EQUIVALENTS 9,36,149 (71,25,456)
D CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 8,78,50,472 9,49,75,928
E CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 8,87,86,621 8,78,50,472
A. CASH FLOW FROM OPERATING ACTIVITIES:
Net Profit after Taxes 1,19,73,800 50,15,621
Add : Provision for Taxes 58,69,827 24,11,404
Net profit before taxes (i) 1,78,43,627 74,27,025
Adjustment for :
Depreciation charges 15,75,629 14,38,746
Provision for NPA’s (1,25,132) 25,33,487
Provision on Standard Assets 6,32,352 8,10,416
Depreciation on investment (1,25,277) (3,54,132)
Provision for Non-Performing investment 8,34,572 (2,06,601)
Other provisions (6,00,519) 60,268
Interest paid on subordinate Bonds (Financing Activities) 22,17,163 19,89,374
Total Adjustment (ii) 44,08,788 62,71,558
Operating profit before change in Operating assets & liabilities ( i ) + ( ii ) 2,22,52,415 1,36,98,583
Adjustment for changes in Operating Assets & Liabilities
Increase / (Decrease) in Deposits 7,32,73,584 6,64,92,303
Increase / (Decrease) in Borrowings 4,885 (43,796)
Increase / (Decrease) in Other liabilities & provisions 5,59,19,298 1,91,51,977
(Increase) / Decrease in investments (1,06,50,933) (2,96,46,711)
(Increase) / Decrease in Advances (11,84,40,228) (3,79,05,010)
(Increase) / Decrease in Other Assets (2,20,13,866) (4,50,02,497)
Net Cash flow from Operating activities ( iii ) (2,19,07,260) (2,69,53,734)
Cash generated from operation ( i + ii + iii ) 3,45,155 (1,32,55,151)
Less : Tax paid 45,50,287 24,29,457
TOTAL : ( A ) (42,05,132) (1,56,84,608)

44
B. CASH FLOW FROM INVESTING ACTIVITIES :
a) Fixed Assets (12,34,655) (8,51,442)
b) Investment in Subsidiary - -
TOTAL : ( B ) (12,34,655) (8,51,442)
C. CASH FLOW FROM FINANCING ACTIVITIES:
a) Share Capital 98,593 2,19,436
b) Share Application Money (9,35,000) 9,35,000
c) Share Premium 42,19,506 66,45,532
d) Tier I & II Bonds 52,10,000 36,00,000
e) Interest Paid on Bonds (22,17,163) (19,89,374)
TOTAL : (C) 63,75,936 94,10,594
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
D. YEAR
(1st April)
a) Cash in hand & Balance with R.B.I 7,75,02,028 3,68,53,326
b) Balance with Banks & Money at Call & Short Notice 1,03,48,444 5,81,22,602
TOTAL : (D) 8,78,50,472 9,49,75,928
E. CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
a) Cash in hand & Balance with R.B.I 7,79,40,577 7,75,02,028
b) Balance with Banks & Money at Call & Short Notice 1,08,46,044 1,03,48,444
TOTAL :( E ) 8,87,86,621 8,78,50,472
for the year ended 31st March, 2023 Table 4.4

4.4 DATA ANALYSIS & INTERPRETATION

Financial Data Analysis:
Financial data analysis focuses on evaluating J&K Bank Pvt Ltd.'s financial performance
over the past financial years.
The following financial metrics and ratios are calculated and analyzed:
• Profitability Ratios (e.g., Net Profit Margin, Return on Equity) Liquidity Ratios (e.g.,
Current Ratio, Quick Ratio)
• Solvency Ratios (e.g., Debt to Equity Ratio, Interest Coverage Ratio) Efficiency
Ratios (e.g., Inventory Turnover, Asset Turnover)
• Growth Trends (e.g., revenue growth, asset growth)

LIQUIDITY COVERAGE RATIO AS ON 31.03.2023

45
 Qualitative disclosure for LCR:
Liquidity Coverage Ratio (LCR) guidelines were implemented by the Banks with an
objective to maintain adequate level of unencumbered High Quality Liquid Assets
(HQLAs) that can be converted into cash to meet liquidity needs for a time-horizon up
to 30 calendar days under a significantly severe liquidity stress scenario.

LCR = Stock of High-Quality Liquid Assets (HQLAs)

Total Net Cash Outflows over the next 30 calendar days

Liquidity Coverage Ratio of J&K Bank (LCR) (Amount in crore)

Quarter March Quarter December Quarter September Quarter June 2022

2023 2022 2022
Total Total Total Total Total Total Total Total
Unweigh Weight Unweigh Weighte Unweigh Weight Unweigh Weight
ted ed ted d value ted ed ted ed
value value value (Averag value value value value
(Averag (Avera (Averag e) (Averag (Avera (Averag (Avera
e) ge ) e) e) ge ) e) ge )
High Quality Liquid Assets
1 Total High Quality Liquid Assets 30280.73 30259. 30102.74 29632.62 30131.40 30131.07 35335.83 35332.8
( HQLA ) 92 5
Cash Outflows
2 Retail deposits and deposits from 85082.06 6267.8 80874.2 5932.56 82182.59 5977.37 83092.82 6045.23
small business customers, of 9 6
which
(i) Stable deposits 46278.272313.95 43871.79 2193.60 44744.77 2237.24 45287.60 2264.71
(ii) Less stable deposits 38803.78 3953.9 37002.4 3738.96 37437.81 3740.13 37805.23 3780.52
5 7
3 Unsecured wholesale funding ,of 19758.50 9495.7 22041.95 10824.49 24378.14 11556.90 28914.58 13805.36
which 7
(i) Operational Deposits (all 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
counterparties)
(ii) Non Operational deposits ( all 19758.50 9495.7 22041.95 10824.49 24378.14 11556.90 28914.58 13805.36
counterparties) 7
(iii) Unsecured debt 0.00 0.00 0.00 0.00 0 0 0 0
4 Secured Wholesale funding 0.00 0.00 0.00 0.00
5 Additional requirements of which 1.25 1.25 0.00 0.00 0.00 0.00 41.67 41.67
(i) Outflows related to derivative 0.86 0.86 0.00 0.00 0.00 0.00 41.67 41.67
exposure and other collateral
requirements
(ii) outflows related to loss of 0.00 0.00 0.00 0.00 0 0 0 0
funding on debt products
(iii) credit and liquidity facilities 0.00 0.00 0.00 0.00 0 0 0 0

46
 6 Other contractual funding 6957.00 598.56 9529.39 742.31 7039.83 643.30 7593.50 869.36
Obligations
7 Other contingent funding 3628.74 137.65 3530.68 161.25 3776.89 132.32 3854.92 141.22
Obligations
8 Total cash outflows 16501.9 17660.60 18309.8 20902.8
9 9 4
Cash Inflows
9 Secured Lending (e.g. reverse 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
repos)
10 Inflows from fully performing 2397.04 1227.17 2520.01 1323.87 2186.84 1230.76 5882.22 0
exposures
11 Other cash inflows 655.49 326.66 0.00 0.00 0 0 1866.19 1003.07
12 Total cash inflows 3052.52 1553.83 2520.01 1323.87 2186.84 1230.76 7748.41 1003.07

13 TOTAL HQLA 30259. 29632.62 30131.07 35332.8

92 5
14 Total Net Cash Outflows 14948.1 16336.73 17079.12 19899.77
7
15 Liquidity Coverage Ratio (%) 202.43 181.39 176.42 177.55
Table 4.5

In adherence with RBI norms vide circular no. RBI/2014-15/529 DBR. No.
BP.BC.80/21.06.201/2014-15 dated 31st March 2015, average weighted and unweighted
amounts have been calculated taking simple daily average. We have considered 46 data
points for the quarter March 2023.

Based on the daily average of the last three months (4th Quarter of FY 2022-23), the bank's
LCR is 202.43%. Position remains above 100% of minimum requirements. The average
HQLA asset this quarter was Rs 30,259.92, mostly in tier 1 assets. The weighted average of
total revenue is approximately INR 16,501.99. The financial management of the bank is
guided by the guidelines of the Reserve Bank of India (RBI) and the ALM policy of the bank.
ALCO was mandated by the company's board of directors to develop a financial strategy that
would ensure the budget was diversified and met the company's performance. In addition to
daily/monthly income statements, banks also prepare daily income statements in order to
regularly evaluate the bank's expected income.

NET STABLE FUNDING RATIO (NSFR)

Net Stable Funding Ratio (NSFR) guidelines ensure reduction in funding risk over a
longer time horizon by requiring banks to fund their activities with sufficiently stable
sources of funding in order to mitigate the risk of future funding stress. The NSFR is
defined as the amount of Available Stable Funding relative to the amount of Required
Stable Funding.

47
 NSFR Disclosure
Template
Unweighted value by residual
maturity Weigh
(` in 6 months ted
Crore) <6 to > 1yr Value
No months < 1yr
maturity
ASF Item
1 Capital: (2+3) 9420.77 1000.00 0.00 15664.70 26085.48
2 Regulatory capital 9420.77 1000.00 0.00 1481.00 12388.14
3 Other capital instruments 0 0 0 14183.70 14183.70
Retail deposits and deposits from
4 66016.40 14686.10 18029.94 0.00 91627.76
small business customers: (5+6)
5 Stable deposits 35028.25 9724.65 10618.36 0 52602.70
6 Less stable deposits 30988.16 4961.45 7411.58 0 39025.07
7 Wholesale funding: (8+9) 0.00 5806.56 3721.19 0.00 4697.88
8 Operational deposits 0.00 0.00 0.00 0 0.00
9 Other wholesale funding 0.00 5806.56 3721.19 0.00 4697.88
10 Other liabilities: (11+12) 0.00 0.00 0.00 0.00 0.00
11 NSFR derivative liabilities 0.00 0.00 0.00 0.00
All other liabilities and equity not
12 included in the above categories 0 0 0 0 0

13 Total ASF (1+4+7+10) 122897.48

RSF Item
14 Total NSFR high-quality liquid assets 1388.00
(HQLA)
Deposits held at other financial
15 institutions for operational 111.51 0.00 0.00 0.00 55.75
purposes
16 Performing loans and securities: 333.61 14748.80 14453.57 54600.92 58358.00
(17+18+19+21+23)
Performing loans to financial
17 0 0 0 0 0
48
 institutions secured by Level 1 HQLA

Performing loans to financial

18 0 970.87 0 0 145.63
institutions secured by non-Level 1
HQLA and unsecured performing
loans to financial institutions
Table 4.6

Performing loans to non- financial

corporate clients, loans to retail and
19 small business customers, and loans 0 12497.5 9668.31 46601.21 49030.06
8
to sovereigns, central banks and
PSEs, of which:
With a risk weight of less than or
20 equal to 35% under the Basel II 0 0 0 9633.80 6261.97
Standardised Approach for credit
risk
21 Performing residential mortgages, of 0 0 0 7382.98 5454.84
which:
With a risk weight of less than or
22 equal to 35% under the Basel II 0 0 0 4103.45 2667.24
Standardised Approach for credit
risk
Securities that are not in default
23 and do not qualify as HQLA, 333.61 1280.35 4785.26 616.73 3727.47
including exchange-traded
equities
24 Other assets: (sum of rows 25 to 29) 2438.22 0.00 0.00 9237.63 11655.88
25 Physical traded commodities, 0 0
including gold
Assets posted as initial margin
26 for derivative contracts and 28.96 0.00 0.00 104.16 113.15
contributions to default funds of
CCPs
27 NSFR derivative assets 0 0 1.66 1.66
NSFR derivative liabilities before
28 deduction of variation margin posted 0 0 1.55 1.55

29 All other assets not included 2409.26 0.00 0.00 9130.26 11539.52
in the above categories
30 Off-balance sheet items 0.00 0.00 2817.41 0.00 140.87
31 Total RSF (14+15+16+24+30) 71598.50
32 Net Stable Funding Ratio (%) 170.95%

49
The bank's NSFR stood at 170.95 per cent at the end of Q4 (FY2022-23), which is above the
minimum maintenance requirement of 100 per cent. Available Stable Funds (ASF) as on
March 31, 2023 is Rs. As on March 31, 2023, Requirements Security Fund (RSF) is Rs
122897.48 Crore and Requirements Security Fund (RSF) is Rs 71598.50 Crore. Available
Stable Funds (ASF) arise primarily from all managed funds and deposits from retail, retail
and non-financial customers under the Basel III capital adequacy criteria set by the Reserve
Bank of India and the RBI. The main driver for Required Financial Security (RSF) is non-
performing loans with a maturity of one year or more.

Table I showing Deposits and Advances of JK bank

Year Deposits Advances
2016-2017 72,463.09cr 49,816.11cr
2017-2018 80,006.50cr 56912.74cr
2018-2019 89,638.90cr 66,271.51cr
2019-2020 97,7882.3cr 64,399.07cr
2020-2021 108,061.15cr 66,841.73cr
2021-2022 114,710.38cr 70,400.68cr
2022-2023 122,037.74cr 82,285.45cr
Table 4.7

Table II showing gross NPA to gross Advances Ratio

Year NPA %
2018-2019 8.97
2019-2220 10.97
2220-2021 9.67
2021-2022 8.67
2022-2023 6.04
Table 4.8

50
Chart II illustrates the Gross NPA to Gross Advances Ratio of JK Bank spanning the past five
financial years.

NPA %
12

10

0
2018-19 2019-20 2020-21 2021-22 2022-23

NPA %

Fig. 4.1

NPA %
12

10

0
2018-2019 2019-2220 2220-2021 2021-2022 2022-2023
NPA % 8.97 10.97 9.67 8.67 6.04

Fig. 4.2

INTERPRETATION: The table shows the ratio of total non-performing assets to total
advances for five fiscal years. The data shows the difference in the ratio indicating the
51
company's assets. From 2018 to 2019, the proportion of total non-performing assets was 9.38%,
and among the non-performing assets there were also a number of advances. The following
year, in 2019-2020, this rate increased to 11.91%, indicating the negative quality of the
property. It then remains at a high level of 10.40% from 2020 to 2021. However, there is a
slight improvement in 2021-2022 and the rate drops to 9.62%. The latest data for the period
2022-2023 shows that total non-performing assets increased to 6.32%, indicating that the
situation of non-performing assets has improved. These changes can be attributed to various
factors affecting banks' lending and credit risk management strategies. The change reflects that
the bank has faced challenges for years regarding the quality of its loan portfolio and credit risk
management strategy. Although the decrease in the total NPL ratio is seen as a positive result,
it is worth noting that a high ratio indicates that the risk increases and the profit decreases.
Therefore, although the loss of all non-performing assets in the past year is a positive
development, it is important to evaluate and improve the property inheritance in terms of good
profits and financial health.
Table III showing Net NPA TO Net Advances Ratio

Year NPA%
2018-2019 4.89

2019-2220 3.48

2220-2021 2.95

2021-2022 2.49

2022-2023 1.62
Table 4.9

Below is the graphical & chart representation of Net NPA TO Net Advances Ratio

NPA%
6
4.89
5

4 3.48
2.95
3 2.49

2 1.62

0
2018-2019 2019-2220 2220-2021 2021-2022 2022-2023

Fig. 4.3

52
 NPA %

2022-23
10% 2018-19
2021-22
32% 2018-19
16%
2019-20

2020-21 2020-21
19% 2019-20 2021-22
23%
2022-23

Fig. 4.4

INTERPRETATION: Table III shows the NPA net/net advance ratio for five consecutive
years. The fact that the rate was 4.89% in 2018-2019 shows that some progress has been
transferred to non-performing assets. The following year, in 2019-2020, this rate improved and
fell to 3.48%, reflecting the positive development in real estate. This positive trend continues
in 2020-2021 and the rate increases to 2.95%. In 2021-2022, this rate remains low at 2.49%,
indicating that in addition to progress, the rate of non-working assets is also high. The latest data from 2022
to 2023 shows that the rate continues to fall to 1.62%, indicating that the number of non-
performing assets is increasing and assets are recovering. These findings show that the
company is successful in managing and reducing non-performing assets, which is a good
indicator of its financial stability and risk management.
Table IV showing Dividend paid to shareholders from the last seven years.

Years %age of dividend Price per share

2016-17 175.00 1.75
2017-2018 - -
2018-2019 - -
2019-2220 - -
2220-2021 - -
2021-2022 - -
2022-2023 50.00 0.5
Table 4.10

53
Below is the graphical & chart representation of Dividend paid to shareholders from the last
seven years.

Divident paid %

175

50

1.75 0 0 0 0 0 0.5
2016-17 2017-2018 2018-2019 2019-2220 2220-2021 2021-2022 2022-2023

%age of dividend Price per share

Fig. 4.5

200
180
160
140
120
100
80
60
40
20
0
%age of dividend Price per share

2016-17 2017-2018 2018-2019 2019-2220

2220-2021 2021-2022 2022-2023

Fig 4.6

INTERPRETATION: When the income statement of the last seven years is examined, it is
seen that there has been a significant change in the bank's distribution policy. The bank paid
dividends of 175% (Rs 1.75 per share) and 50% (Rs 0.50 per share) in FY 2016-17 and FY
2022-2023 respectively. However, no dividends were collected in 2017-2018, 2018-2019,
2019-2020, 2220-2021 and 2021-2022. This shows that the bank's dividend policy has changed

54
in this period, dividend distribution will continue in 2022-2023, but dividend distribution is
lower than last year.

4.5 PERFORMANCE AT GLANCE

• The aggregate business of the Bank stood at Rs.204323.19 Crore at the end of the financial
year 2022-23.
• The total deposits of the Bank grew by Rs.7327.36 Crore from Rs.114710.38 Crore as on
31st March, 2022 to Rs.122037.74 Crore as on 31st March, 2023, a growth of 6.39 percent.
• CASA deposits of the Bank at Rs. 66017.98 Crore constituted 54.10 percent of total
deposits of the Bank.
• Cost of deposits for current FY stood at 3.79 percent.
• The net advances of the Bank stood at Rs.82285.45 Crore as on 31st March, 2023.
• Yield on advances for the current FY stood at 8.91 percent.
• Average Priority sector advances stood at Rs.32,800.26 Crore as on 31st March, 2023.
• The Bank effected cumulative cash recovery, upgradation of NPA’s and technical write-off
of Rs.8762.71 Crores during FY 2022-23.
• Investment portfolio of the Bank stood at Rs.34829.15 Crore as on 31st March, 2023.

Insurance business
The Bank earned a commission income of Rs. 70.69 Crore from Insurance Business by
mobilizing a business of Rs 568.2 Crore in life insurance (including fresh retail life business
of Rs 155.17 Crore, Credit life business of Rs 96.68 Crore and renewal business of Rs 316.35
Crore) and Rs 245.66 Crore in non-life insurance during financial year 2022-23

Income analysis
• The Interest income of the Bank stood at Rs.9355.11 Crore in the year 2022-23. Interest
expenses stood at Rs.4609.83 Crore for FY2022-23. The Net Interest Income stood at Rs.
4745.28 Crore for FY2022-23.
• The Net Income from operations [Interest Spread plus Non-interest Income] stood at
Rs.5502.09 Crore in the financial year 2022-23.
• The Operating Expenses registered an increase of Rs.50.82 Crore during the financial year
2022-23 and stood at Rs.3643.60 Crore as compared to Rs.3592.78 Crore in 2021-22.
• The Cost to Income ratio (Operating Expenses to Net Operating Income) stood at 66.22
percent in the financial year 2022-23.

Gross Profit
55
The Gross Profit for the financial year 2022-23 stood at Rs. 1858.49 Crore.

Provisions
The Provision for Loan Losses, Standard Assets, Taxation and others aggregated to Rs.661.11
Crore in the financial year 2022-23.
Net Profit/Loss
The Bank registered a Net Profit of Rs.1197.38 Crore for the financial year 2022-23.

Dividend
With all the performance of the bank and while conserving capital to support future growth,
the Board of Directors, in its meeting held on 4 and 5 May 2023, approved the allocation of
50% of the personnel budget2022-23. Members of the 85th Annual Meeting. If approved, the
total dividend income in 2022-23 will be Rs. 5 1.57 kroner. The date of dividend payment is
stated in the report of the company's next 85th Annual Meeting. Dividend income is taxable to
members under the Income Tax Act 1961. Accordingly, dividends are paid to members after
deducting applicable tax, if any.

Branches/ATM Network
In the financial year 2022-23, 10 new branches were established, bringing the total number of
branches to 980 (including IARB) by 31.03.2023, spanning 18 states and 4 unions. Breakdown
of Branch Network (including Counter Extension/Mobile Branches and Service Branches) at
the end of FY 2022-23 based on Census 2011:

Area Business Units (including IARBs)

Metro 174
Urban 110
Semi-Urban 162
Rural 544
total 990
Table 4.11

During the financial year FY 2022-23, 5 EBUs/USBs were established taking the total number
of EBUs/USBs to 82, 17 ATMs were commissioned thereby taking the number of ATMs to
1404 as on 31.03.2022.

56
Net Worth and Capital Adequacy Ratio (CRAR)
• The Net Worth of the Bank stood at Rs.8323.67 Crore on 31st March 2023.
• Capital Adequacy Ratio under Basel III stood at 15.38 percent as of March, 2023. The tier I
component of CRAR is 11.04 percent as on 31st March 2022.
• Book Value per Share for the financial year 2022-23 stood at Rs.67.76.

57
NON-PERFORMING
ASSETS (NPA)

58
 CHAPTER 5

NON-PERFORMING ASSETS (NPA)

OVERVIEW
Commercial banks hold a diverse portfolio of assets, each with a unique purpose. Among these
assets, those that generate regular income are called performing assets (PA), while those that
do not contribute periodic income are classified as non-performing assets (NPA). Non-
performing assets mainly consist of loans that have ceased to generate income due to the
inability of customers to repay the principal and accrued interest within the specified period of
time. Historically, non-performing assets were mainly associated with corporate borrowers.
However, as banks have expanded their lending business to include various types of consumer
loans, such as mortgages, car loans, personal loans, and education loans, the situation has
grown significantly. At the same time, regulatory agencies have introduced stricter guidelines
for asset classification.
In the context of consumer loans, a loan is defined as bad credit or non-performing if the
borrower misses regular monthly instalments (EMIs) for 90 days. A high level of NPAs
indicates financial instability in a bank, and this can have dire consequences, especially in the
financial markets, including the stock and money markets. As a result, banks are encouraged
to resolve non-performing loans quickly. The goal is to recover or eliminate these loans from
your balance. According to regulatory guidelines, an asset is classified as a non-performing
asset (NPA) if the borrower fails to meet the principal and interest payment obligations for 180
days. However, from March 2004, the default applies after 90 days of non-payment.

Moreover, it should be noted that if any advances or credit facilities proposed by

the bank to the borrower are classified as non-performing, the bank will treat all
advances and credit facilities given to the borrower as non-performing assets.
This classification ignores outstanding achievements or credits that may maintain
performance status.

5.1 DEFINITION
An asset, whether it is a leased asset or otherwise, gets a non-performing status if it does not
contribute to the bank's income stream. In the context of financial classification, 'non-
performing asset' (NPA) is generally defined as an asset whose interest and/or principal amount
has not been paid and which has not been paid for a full quarter from the due date of such
payment.
Significant changes were made in the year ended 31 March 2004 to conform to international
best practices and improve transparency. These changes include the 'past 90 days' rule for
determining NPAs. Therefore, from March 31, 2004, non-performing asset (NPA) includes -
several scenarios:

59
- If interest and/or principal payments are overdue by more than 90 days in the case of a loan.

- Accounts purchased with discounts remain valid for more than 90 days.
- If interest and/or principal repayments are issued for two agricultural harvest seasons, the
period for agricultural progress should not exceed two and a half years.
- When outstanding amounts remain for more than 90 days for other account categories.

To promote a smooth transition to the 90-day norm, banks are advised to switch to the practice
of paying interest at monthly intervals by April 1, 2002. However, it should be noted that the
date of pre-classification as NPA should remain; did not change due to changes in the
methodology for calculating interest. Therefore, the bank must continue to classify the account
as NPA if the interest charged in any quarter is not fully serviced within 180 days from the end
of the quarter and 90 days from the end of the quarter with effect from March 1, 2002. 31,
2004.
NPA indicates bad credit, which indicates that the borrower has failed to meet his payment
obligations. This concept is supported by Michael et al. (2006) emphasize the impact of NPAs
on bank performance, which in turn reduces profitability, liquidity and solvency. Batra, S
(2003) further states that in addition to affecting financial metrics, NPA also affects the
perception of bankers and the allocation of funds for loans and expansion.

5.2 NPA CONCEPT AND PRUDENTIAL FORM: A Paradigm Revealed

Many assets reside in financial institutions - cash on hand, bank balances,
investments, loans and advances, fixed assets, and more. However, the wonderful concept
known as 'non-performing asset' or NPA covers the lending, development and investment
sectors. In the corridors of prestigious financial institutions, an asset retains the status of
"Active Performance" as long as it performs the expected results without any extraordinary
risks other than normal commercial risks.
The change from "Underperform" status to "Underperform" occurs when the asset receives the
expected results. In simple terms, non-performing assets (NPAs) metamorphose in the form of
interest, fees, commissions or other costs owed to the bank when they are deprived of the
obligation to generate income. interval exceeds the limit of 90 days.

In the realm of prudential norms, the RBI's aspiration is to forge an income recognition policy
founded on objective criteria and grounded in documented recovery records rather than mired
in subjective considerations. Simultaneously, the classification of a bank's assets must be
adjudicated upon using an objective yardstick, ensuring the consistent and uniform application
of these norms across the financial landscape. On the orders of the International Convention
and the Narsimham Committee, the Reserve Bank of India (RBI) introduced comprehensive
guidelines for the classification of credit institutions as non-performing assets from the

60
financial year 1992-93. Although these guidelines are considered significant progress, they
only partially addressed the unfulfilling requirements of the labyrinth. As a result, RBI has
issued regular circulars giving instructions and advice to banks and guiding them on relevant
issues.
An attempt has been made to collate the numerous circulars issued by the RBI up to 17th July
2004 on the subject of this semi. This consolidation is a testament to the continued pursuit of
fiscal prudence and regulatory transparency by the Reserve Bank of India.

5.3 Prudential Accounting Norms: Fostering Financial Responsibility

Before the comprehensive financial sector reform of 1992-93, banks operated in a different
paradigm. They accrued interest on their loan account and recognized it as income, even though
the prospect of repayment looked bleak. This practice, though common, is not unwise.
Recognizing revenue in the uncertainty of recovery poses a significant risk.
In response to this problem and following the recommendations of the Narsimham Committee,
the Reserve Bank of India (RBI) introduced registration norms in the financial year 1992-93.
The rules are radically different - interest is now negotiated on a cash basis rather than on an
accrual basis. This change in prudential accounting norms is reinforced by the concept of NPA,
where 'N' stands for 'Non-performing', 'P' for 'impairment' and 'A' for asset classification.

The main components of prudential accounting standards are:

1. Income recognition:
- Banks must divide their loan accounts into two categories: Performing Assets (PA) and
Non-Performing Assets (NPA).
- Revenue is recognized on an accrual basis to "realize" the asset.
- Interest on "non-performing" assets is recognized only when received in cash. Other income
streams, such as dividends, can be booked on a residential basis if certain conditions are met.
- Income recognition follows RPA guidelines, ensuring that interest is not credited to NPA
accounts on an accrual basis.
2. Asset Classification:
- Assets are classified according to credibility and degree of dependence on collateral for
payment.
- Classification includes normal assets, non-performing assets, doubtful assets and losses.

3. Supply:
- Banks must make provisions against NPAs, provide 100% provision for loss assets and
different percentages for other categories.

61
Prudent Measures Taken:
- Bank has set up special departments like recovery cell, recovery unit and NPA management
unit.
- The recovery target is set to improve debt recovery.
- RBI conducts annual on-site audits to assess policy, size and quality of loan portfolio.
- Offsite income provides insight into credit quality at quarterly intervals.

Impact of prudential norms:

- The introduction of prudential norms in 1992-93, along with other transparency measures,
significantly improved pre-sanctions assessment and post-sanctions monitoring.
- After 1992, the new accruals of non-performing loans decreased significantly, indicating
the impact of these regulations on improving the health of the banking industry.

Continuous evolution:
- Prudential's accounting standards continue to evolve to adapt to emerging challenges,
technological advances and global financial standards.
- They play an important role in fostering financial responsibility, transparency and tolerance
in the banking sector.
Prudential's accounting standards have played a transformative role in establishing responsible
financial practices in the banking industry. They have contributed to strengthening risk
management, greater transparency and integrity of financial institutions, promoting stability
and confidence in the financial sector.

Various Aspects Of Non-Performing Assets (Npas)

In the banking sector, non-performing assets (NPAs) show multifaceted characteristics, the
difference between Gross NPAs and Net NPAs, each providing a unique insight into the
financial position.
a) Amount of NPA:
Gross NPA includes the total amount of loan assets that meet the Reserve Bank of India (RBI)
criteria as on the balance sheet date. These figures act as a barometer of credit quality in banks
and include various categories of non-performing assets such as non-performing, doubtful and
bad assets. To determine the level of this measure, the gross NPA ratio is calculated as follows:
Gross NPA Ratio = Gross NPA / Gross Advances

62
b) Net NPA:
Net NPAs take a more nuanced approach by considering the provisions made by banks against
NPAs. In essence, Net NPAs reveal the actual burden borne by banks, factoring in the
provisions necessitated by central bank guidelines. Given the significant provisions banks must
set aside in India, primarily due to the complexities of loan recovery and write-offs, the
divergence between gross and net NPAs can be substantial. Net NPAs are derived using the
formula:
Net NPAs = (Gross NPAs – Provisions) / (Gross Advances - Provisions)

The Reserve Bank of India said that compared to other Asian countries and the US, India's non-
performing assets are more pronounced than the overall NPA figure. This feature stems from
historical factors such as difficulties in recovering loans, legal regulations limiting foreclosures
and bankruptcies, prolonged legal battles, loans to public sector entities, loan waivers, and
focus on priority sector loans. The global context makes net NPAs more favorable in India
based on the tighter provisioning norms set for banks in 1991 as recommended by the
Narasimham Committee.
NPAs are classified into four different categories based on the nature of the asset:
- Standard Assets: These assets are performance measures. They consistently make a profit
and meet their payment obligations on time without the character of NPA. Therefore, no special
rules are required for common assets.
-Sub-Standard Assets: Assets classified as sub-standard are those that have had a non-
performing status for 12 months, indicating inherent risk and deterioration in quality.
- Doubtful Assets: Assets that fall into the category of doubtful assets are struggling with non-
performance for more than 12 months. This prolonged period of inactivity shows their
precarious status.
Impaired Assets: The worst classification is an asset that is deemed to have an irrecoverable
loss. These assets represent redemption points and are usually identified by central banks or
auditors due to their irreversible nature.

5.4 COMPREHENSIVE GUIDELINES FOR ASSET CLASSIFICATION

AND NPA DETERMINATION

Accurate asset classification and timely identification of NPAs are essential in banking
operations. Jammu and Kashmir Bank follows these guidelines to ensure accuracy and
transparency in this process:

Accurate asset classification, timely identification of Non-Performing Assets (NPAs) are

pivotal in sound banking practices. Jammu and Kashmir Bank adheres to a set of meticulous
guidelines to ensure precision and transparency in this process:
63
1. Prompt NPA Identification: - Jammu and Kashmir Bank has established robust internal
systems to eliminate any inclination toward delaying or postponing NPA identification,
particularly concerning high-value accounts. A minimum threshold is determined to identify
high-value accounts, tailored to the bank's business scale. Responsibility and validation levels
for ensuring accurate asset classification are defined by the bank. The system is designed to
swiftly resolve any doubts related to asset classification through designated internal channels
within one month from the date a bank account should be categorized an NPA as per regulatory
norms.
2. Temporary Deficiencies: Classification as NPA based on recovery record instead of
temporary shortfalls such as insufficient capacity, temporary excess balance, loss of stock or
extension of limited period. Temporary problems do not automatically warrant NPA
classification. The bank maintains a three-month period to use stock reports to determine
drawdown, and the amount based on old stock is considered irregular. A working capital
account can be stated as NPA if it is operational and the borrower is in good financial condition,
but there are continuous defaults for 90 days. The three months delay is disappointing.
3. Accounts Regularized Near Balance Sheet Date: Managing accounts with rare or last-
minute loans before the balance sheet date requires a lot of care. Accounts showing specific
weaknesses based on available data are classified as NPAs. In real cases, the bank must provide
satisfactory evidence to the statutory auditors and supervisory officials to establish the
regularity of the bank account and remove any doubt about its business status.
4. Borrower-Based Asset Classification: Asset Classification is borrower-Based rather than
institution-wise. All the facilities provided by the bank to the borrower are considered NPA if
any part is not working. Even if the loan arises from a letter of credit or required guarantee and
is separated in a separate account, the remaining balance in the principal operating account of
the borrower is calculated using prudential rules.
5. Advances under Consortium Arrangements: Classification of assets in consortium loans
based on the recovery records of individual member banks. If the borrower's funds in the
syndicated loan are collected in one bank or the receiving bank is not shared with other member
banks, the account is considered unregistered in the books of other members of the consortium,
resulting in NPA classification. Banks participating in the consortium must secure express
permission from the parent bank to transfer the usual recovery from the parent bank or to
confirm the asset classification in their respective books.
6. Accounts with Erosion in Security Value: - Assets related to credit defaults do not have to
go through various stages of classification and can be immediately classified as doubtful or
loss. A significant erosion in the value of a security occurs when the actual value falls below
50% of the value assessed by the bank or accepted by the RBI during the last review. Such
NPAs can be immediately classified as doubtful and provisions are used in accordance with
regulatory standards. If the value of the security as approved by the bank, approved by the rate
or carried out by the RBI is less than 10% of the outstanding balance in the account of borrower,
the existence of security is disregarded, asset is immediately defined as a loss. It can be debited
from the bank or provided in full by the bank. These comprehensive guidelines reflect Jammu
and Kashmir Bank's commitment to asset classification and NPA determination, ensuring
compliance with regulatory standards, transparency and good banking practices.

64
5.5 Asset Quality, NPAs, and Directed Credit: A Vital Component of
Financial Stability
The stability and viability of financial institutions is closely related to asset quality and
performance metrics. Asset quality is a key determinant of an institution's survival, while
profitability is an important performance indicator. The stability of financial institutions in
times of crisis depends on maintaining profitability and asset quality. This stability, especially
in the banking sector, is very important for the growth of the economy in general. The financial
sector is dominated by commercial banks, which account for a large proportion of assets in the
financial sector. The crucial role of financial intermediation has played an important role in
promoting economic growth through savings, especially in India. Therefore, any challenges
faced by the banking sector have a direct impact on the well-being of the economy in general.
In the post-liberalisation era, Indian banking has focused on increasing transparency and
introducing best practices. A number of measures have been introduced to address asset quality,
non-performing assets (NPAs) and a focused credit framework:
1. Classification of Doubtful Assets: - An asset is classified as doubtful if it is in the non-
performing category for 18 months compared to the previous norm of 24 months.
2. Treatment of Government Guaranteed Advances:- Government Guaranteed Fixed
Advances are treated as NPAs which provide a more accurate assessment of the quality of the
asset portfolio.
3. Reduction of NPA: - Joint efforts are made to lower the average net NPA ratio for all banks
from 5 percent by 2000 to 3 percent by 2002. For banks with international exposure, the target
is higher: to reduce gross NPA to 5 percent and 3 per cent in 2000 and 2002 respectively, and
to reduce net NPAs to 3 per cent and 0 per cent for those years.
4.Asset Reconstruction Company (ARC): is proposed to deal with the high concentration of
NPAs in the doubtful and loss category. ARK will issue bonds equal to the market value of the
transferred assets. Alternatively, troubled banks can issue bonds as part of Tier II capital. This
approach will help improve capital adequacy for NPAs that are lost due to claims. To attract
investors to these bonds, the government must provide approved instruments for bank-
guaranteed securities, guaranteed investment certificates (GIC) and provident funds (PF) under
the statutory liquidity ratio (SLR) norms.

5. Elimination of Interest Subsidy: -complete elimination of interest subsidy components for

priority sectors is planned. Even the interest rate on loans under 1000000. 2 crore should be set
for scheduled commercial banks, following the example set in the case of regional rural banks
and cooperative credit institutions.

In fact, this measure highlights the importance of asset quality and NPAs in ensuring financial
stability. They represent a proactive approach to solving challenges and increasing
transparency in the banking sector, which is essential for sustainable economic growth and
stability.
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5.6 REASONS FOR RISE IN NPAs OF J&K BANK LTD
The banking industry is grappling with a difficult problem; increasing non-performing loans
(NPAs). The challenges faced by public sector banks (PSBs) are unique when compared to the
private sector and foreign banks. The increase in NPAs in PSBs can be attributed to the
interplay of external and internal factors.

External features:
1. Ineffective Recovery Courts: Recovery courts established by the government to facilitate
loans and recovery have been repeatedly criticized for being ineffective and ineffective. Failure
to meet the turnaround time puts banks under stress and erodes profitability and liquidity.

2. Willful Defaults: Some borrowers possess the means to repay their loans but intentionally
default. Identifying these individuals and taking appropriate action to reclaim extended
advances is crucial.

3. Natural Calamities: Frequent natural disasters in India, such as floods and droughts, render
borrowers unable to meet their loan obligations. Banks are compelled to make substantial
provisions to compensate for these defaulted loans, impacting overall profits. For instance, the
devastating floods in Kashmir had a severe impact on Jammu and Kashmir Bank's NPA
performance.

4. Industrial disease: Poor management, inadequate resources, outdated technology and

changing government policies can cause disease. Banks that finance these troubled businesses
often have difficulty raising loans, resulting in reduced revenues and profits.

5. Lack of planning needs: Entrepreneurs sometimes fail to meet the needs of the business,
resulting in overstocking and failure to repay loans. The bank recovered only a small portion
of the funds from the asset liquidation and recorded what was not recovered as non-performing
assets.
6. Changes in Government Policies: Changes in government policies in the financial sector
require changes. For example, the decline of the handloom industry can be attributed to the
withdrawal of government support and the conversion of this support into non-performing
loans.

Internal Factors:

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1. Bad credit process: Adherence to the three principles of bank lending (security, efficiency
and profit) is essential. Security depends on the borrower's ability and willingness to repay;
This depends on tangible assets, job performance, character, integrity and reputation.

2. Insufficient use of technology: Inadequate technology and data management prevent timely
decision-making. Lack of appropriate management information (MIS) and business finance
systems can lead to poor credit servicing and non-performing assets. Computerization of all
branches is essential.
3. Incorrect SWOT Analysis: Incorrect Strengths, Weaknesses, Opportunities and Threats
(SWOT) can lead to distrust in the first place due to lending habits. Banks must consider loan
capital, collect loan information, analyze the balance sheet, review loan targets, and strictly
evaluate the profitability and progress of the project.
4. Inadequate assessment: Inadequate credit assessment in NPAs as advances are given to
borrowers who are unable to repay the loan. A good credit evaluation process can reduce this
risk.
5. Poor management: Careful selection of borrowers, use of verifiable assets and various risks
can protect the bank's profits. Managers should not focus on lending in specific sectors or
industries to avoid high risk.
6. Lack of Regular Business Visits: Regular visits to credit bureaus can lead to non-compliance
and reduced interest rates and collections. Regular maintenance visits can help repair defective
products caused by intentional errors. Addressing external and internal factors is important for
public safety agencies to effectively manage and reduce resource inactivity. These include
measures such as strengthening the recovery process, improving the credit evaluation process,
and encouraging advances in technology.

5.7 IMPACT OF NPAs ON PERFORMANCE OF BANKS

In the financial world, the word "NPA" sends shivers through people in the banking and
business sector. NPA, which simply means "Non-Performing Asset", embodies a simple but
daunting rule: When interest or other monies owed to the bank are not paid for more than 90
days, the entire loan at the bank becomes a non-performing asset. Loan repayment is always a
big challenge for banks and financial institutions and there should be two ways to get rid of
this problem. Firstly, banks should consider the possibility of avoiding NPAs altogether and
secondly, if this turns out to be untenable, the relevant assets should be reviewed and then the
decisions checked.

In today's era of globalization, the business and financial sector is at the centre, while the Indian
Banking and Finance Sector is at the centre. The banking industry faces a difficult problem:
increasing inefficiency. NPAs cast a shadow over banks' profits and losses. While the main duty
of banks is to provide loans for various purposes such as agriculture, business, personal loans
and housing, the nature of non-performing assets has made them cautious about borrowing.

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NPA is a loan on which interest, repayment or both are outstanding for more than 90 days. The
size of non-performing assets is a measure of the bank's credit risk and capital allocation.

Permanent assets play an important role in analyzing the performance of the bank because
NPAs can reduce the margin of the bank and improve the performance of the bank. Provision
should be made for unexpected expenses. Different bank groups include agriculture, public
sector, public sector, etc. It offers advances in various areas such as. The accumulation of non-
performing assets is becoming increasingly important and this problem was first recognized
in the early 1990s. The size of non-performing assets of banks and financial institutions has
crossed a staggering Rs. 15 trillion rupees. While gross NPAs give an idea about the quality of
loans received from banks, net NPAs show the heavy burden carried by these financial
institutions.

It is now clear that the biggest culprits will be in non-essential businesses and will affect the
main lenders. Banks and financial institutions should take measures to reduce non-performing
assets by creative time. Public sector companies stand out in this debate not only because of
their dominance in the banking sector but also because, as private companies, they have to deal
with much larger NPAs. This disparity attracts attention from business and academia because
it is believed that a distressed asset will weaken the bank's profitability, making it less
financially sound and aggravating the bank's profitability.

Rescuing troubled assets requires a comprehensive process that includes various options for
debt collection and restructuring. Banks and financial institutions have the flexibility to create
and enforce their own refund and write-off policies, including mediation and negotiation. The
effects of bank failure are reflected in every field and leave the financial sector in uncertainty.

PROFITABILITY: The existence of non-performing assets (NPA) does not only mean that
money is recorded as non-performing assets; It occurs as a result of wrong customer selection.
Equipment failure not only directly affects the bank's profit, but also increases the cost of risk.
This means that funds frozen in non-performing loans can be invested in projects or assets that
will generate returns. Therefore, equipment failure does not affect current results; They also
reduce long-term growth potential. Additionally, lower profits will result in lower return on
investment (ROI), which will affect the bank's current income.
LIQUIDITY: The presence of non-working assets will cause the income to work, which will
cause the income to decrease. An economic recession can lead to a savings shortage, forcing
banks to borrow money to meet short-term needs. Giving loans in this way adds value to banks.
Additionally, non-performing assets can cause further problems by hindering banks' ability to
make daily payments and meet financial obligations.
PARTNERSHIP OF MANAGEMENT: Managing non-performing assets requires a lot of
time and effort from bank management. Although these resources can be used in many projects
that will lead to better results, they are now directed to solving problems related to the National

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Action Plan. Many times banks hire experts to administer and manage NPAs, which incurs
additional costs.
CREDIT LOSSES: The existence of non-performing assets will increase the credit market
and the bank's happiness. As banks deal with NPA issues, their reputation and brand name will
suffer, affecting the confidence of depositors and investors. Therefore, customers will not want
to leave their money in a bank with a good reputation, which will lead to losses to the company
and loss of trust.

5.8 METHODS & TECHNIQUES USED FOR CONTROLLING NPAs IN

J&K BANK

Methods:
❖ Debtor information
❖ Daily A/c activity
❖ Quarterly maintenance
❖ Daily check - entry and exit
❖ Lower loan amount
❖ Weekly and monthly money loans
❖ Credit report
❖ Weekly report on purchases and discounts advertising rates
❖ Monthly security report based on growth and renewal
❖ No renewal at maturity
❖ Check category statement
❖ Asset Classification and Downgrade Statement
❖ Asset Recycling/Reconstruction
❖ Recycling Declaration

The above process has discussed many things earlier in this report; these are all rigid used
in J&K Bank.

Techniques
The various techniques that are used in recovering NPAs are:

➢ Cash recovery
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 ➢ Restructuring of assets
➢ Compromise settlements
➢ Legal Recovery

This strategy is used very well in J&K Bank: Reduce non-performing assets. Last year, the
bank completed refunds, transfers of non-performing assets and collections of Rs 100 cr.
327.85 Crores compared to Rs. 244.53 Crore in 2008.

The bank's data increased by 22.59% compared to 2008 rupees. 8,757.66 Crore as on March
31, 2008 and Rs. 10,736.33 Crore as on March 31, 2009.
This technology could lead to better outcomes for banks if implemented in countries where
the SARFAESI Act has not been implemented so far. We're working hard to make sure the bill
benefits Johnson & Johnson. In his last speech, the president said that the law will be
implemented in the state soon. J&K Banks is still relying on the implementation of the Act to
further reduce its NPAs.

The procedure followed for loan repayment in J&K is as follows: Bank officials first contact
the borrower who has taken a loan from the bank and refuses to repay. If the depositor does not
respond, bank employees will visit him personally, and if he does not repay the loan, the bank
together with the police will punish the offender.

This is how J&K Bank manages its loans. Had it not been for the SARFAESI Act, the National
Employment Mission continued for decades, otherwise the story would have been different.
This is the only bank in the country that has set up its business on a small scale as the situation
in the state of J&K is difficult for business.

This year, assets under follow-up were the lowest level among companies in the last year. The
percentage of NPA not assessed so far for 2010 is only 0.77 percent which is a very good figure
for the current situation in the state. This percentage will be zero if the government implements
the SARFAESI Act

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 FINDINGS &
SUGGESTIONS

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 FINDINGS

1. Increase in NPAs: J&K Bank's percentage of total NPAs increased significantly during this
period. While total non-performing assets were 10% in 2018-2019, this rate reaches 11% in
2019-2020, indicating that non-performing assets are more involved than progress. Although
there is some improvement in the coming years, such as 9.62% in 2021-2022 and 6.32% in
2022-2023, the NPA level is still alarming.
- 2018-2019: Total NPA- 10%
- 2019-2020: Total NPA- 11%
- 2021-2022: Total NPA- 9.62%
- 2022-2023: Total non - assets - 6.04%

2. Changes in Asset Quality: Changes in the bank's asset quality over the years have revealed
the difficulties of maintaining a stable performance portfolio. These changes have an impact
on banks' profitability and financial stability.

3. Dividend Payout: J&K Bank's dividend has been shown inconsistently. For example, in
2014-15 the bank paid dividends of 210%, but in 2015-16 this rate dropped to 175%, indicating
a shift in profitability.
- 2014-15: Dividend-210%
- 2015-16: Dividend rate-175%

4. Capital adequacy: Capital adequacy ratio is still above regulations at 11.42% in 2018. The
bank's ability to absorb losses. However, this ratio changed in 2018: Capital adequacy is
11.42%

5. Net NPAs to Net Advances Ratio: The ratio of Net NPAs to advances increased over time,
reaching 5% in 2018-2019. This example illustrates the heavy burden that non-performing
loans place on a bank's financial health. - 2018-2019: Net NPL/Net Advance Ratio - 5%

Problems Identified:
1. Non-performing assets: The biggest challenge faced by J&K banks is the increasing number
of non-performing assets (NPAs). This issue highlights the challenges in credit recovery, credit
risk management and effective non-performing loan resolution strategies. The ratio of total
non-performing loans to total advances reached alarming levels, affecting the assets and
profitability of banks.

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2. Product Quality Variation: Variation in product quality reflects the difficulties of maintaining
consistent product performance. This conflict can affect the bank's profitability and financial
stability, making it difficult to predict and manage risk effectively.
3. Irregular payments: Irregular dividends indicate problems in managing earnings and cash
flow. For example, the dividend fell from 210% in 2014-15 to 175% in 2015-16, indicating
unsustainable profits and affecting shareholders' confidence and decision-making.
4. Capital management needs: Changes in the capital adequacy ratio indicate the necessity of
effective capital management to ensure financial stability and management control. Banks need
to strike a balance between capital allocation and risk management.
5. Liquidity and Debt: The increase in non-performing assets has led to distressed, short-term
borrowing needs. For example, net NPA for net advances increased to 5% in 2018-2019,
indicating financial problems and additional costs associated with borrowing. - 2018-2019: Net
NPA/Net Advance Ratio - 5%
6. Resource management: Managing non-performing assets requires bank management to
invest more time and energy and allocate resources from other productive activities. Hiring
professionals to manage equipment failure will increase operating costs and impact overall
profitability.
7. Legal issues: Slow legal process and high backlog at the District Court (DRT) hinder
recovery of the loan. The legal process can take years to complete, leaving creditors with just
enough money to delay care.
8. Business reputation: A potential failure could damage a company's business reputation and
customer trust, affecting its competitiveness and long-term stability. The scale of NPAs is
alarming and can impact business confidence.
J&K Bank responds to asset defaults, asset quality changes, payment disparities, capital
controls, profitability issues, regulatory legal and reputational risks during the period from
2014 to 2023. These problems have a direct impact on the operation and security of the
financial institution. and market Copy.

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 SUGGESTIONS

J&K Bank is a private company operating in the country. The bank is doing very well. Its
people-oriented policies have always been successful and have set an example for the banking
sector in the state and even in the country. The bank also plays an important role in the
development of the country as it contributes the most to the economy of J&K.

Here are some tips that will be useful for banks:

➢ Special training should be provided so that employees are more knowledgeable.
➢ Before setting up a new branch, banks should try to go online, as online banking will
make maintenance easier and ensure good service of the bank.
➢ The bank should try to be one of the best in the country because it has strong customers
and human rights.
➢ Banks should reward their employees so that their self-confidence increases and they
work harder.
➢ An important advice is that banks should not always ignore advertising because today's
business is an advertising business and advertising plays an important role in economic
growth. Another suggestion is that banks should start increasing their daily working
hours to reach maximum working days as Kashmir is mostly closed due to the fighting.

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 CONCLUSION

The purpose of this report is to examine the management of non-performing assets of J&K
banks. The overall analysis concludes that J&K Bank's performance in NPA underwriting has
been good but inconsistent. Although the bank's current performance is better than its
previous performance, it still needs to recover good assets, maintain good performance in
terms of efficiency, and eliminate all non-performing assets because the bank's operations
have been affected. from entities that did not affect in the past. Last year the bank had the
best year of its life and reported a profit this year too.

The organization struggled and succeeded in reducing the NPA level to below 1% in 2010,
which has not been verified so far. The bank has taken strong steps to build customer
confidence. One such initiative is the Kiddermatt Center, which has attracted interest from all
over the country. The people of J&K state trust J&K Bank. Most people in the state prefer
J&K Bank over other banks because this bank has been serving the Kashmiri nation for
decades. Nearly 80 per cent of the state's population says they are bankers of J&K Bank.
They believe that if the SARFAESI Act is implemented in the state, it is not far for J&K Bank
to become a private company in India as it does not comply with the Act> J&K Banks has a
certain percentage of NPA assets.

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 BIBLIOGRAPHY

BOOKS

Research Methodology Navdeep Aggarwal

Marketing Management Philip Kotler
Bank Watch Sajad Bazaz
Marketing Management T.N. Chabra

MAGAZINES & NEWSPAPERS

➢ Business World
➢ Business world
➢ India today
➢ Business today
➢ State Times
➢ Times of India
➢ Economic Times
➢ Daily Excelsior

WEBSITES & BROWSER

www.rbi.com
www.jkbank.com
www.scribd.com
www.academia.edu
www.Wikipedia.org
www.shiksha.com
Microsoft edge

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QUESTIONIARE: -

Respected Sir/Madam

I AKHIL JASROTIA student of CHANDIGARH UNIVERSITY, conducting a survey on

“NPAs MANAGEMENT OF J&K BANK”. The following statements relate to your
feelings about the J&K bank. Please show the extent to which you believe J&K bank has the
feature described in the statement. I request you to the option which in your opinion are
believed to be true.

Name:
Age:

QUESTIONS Strongly Disagree Neither Agree Strongly

Disagree agree Agree
Nor
disagree
1. Does J&K bank have modern
looking equipment?
2. Does the materials associated
with the online banking (such as
instruction to use the online
banking or their bank app) are
visually appealing at the bank?
4. When you have a problem
regarding Loans and Advances,
does the bank shows a sincere
interest in solving it?
5. Does the bank insists on error
free records?
6. Does the bank tells the customer
about the Loans and Advances
frauds?

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7. Does the Loans and Advances
full fill your specific needs?
8. Does the online banking server
have the knowledge to answer your
questions?
9. Do you feel safe while managing
the credit formalities?
10. Is the Loans and Advances of
J&K Bank trustworthy?

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