A Project Report

ON

“A STUDY OF NON-PERFORMING ASSETS BANK OF MAHARASHTRA”

(2021-2022)

In Partial of the requirement for the award of

Master Degree in Commerce

Submitted By

Miss. Ankita Sham Borkar

Roll No.: 15431

Seat NO:6694

Under the Guidance

Dr. Niranjan Shah

[M. Com II]

To,

The Principal,

Anekant Education Society’s

Tuljaram Chaturchand College, Baramati-413102

Affiliated To Savitribai Phule Pune University, Pune.

Academic year 2021-2022

1
 Declaration

Miss. Ankita Sham Borkar, I hereby declare that the Project Work titled
title “A STUDY OF NON-PERFORMING ASSETS BANK OF
MAHARASHTRA” the original work done by me and submitted to the
Savitribai Phule Pune University, Pune in partial fulfillment of
requirements for the award of Master of Commerce under the
specialization of Advanced Accounting and Taxation is a record of
original work done by me under the supervision of Dr. Niranjan Shah.

Signature: Miss. Ankita sham Borkar

Date: (M. com Part II)

2
 Acknowledgement

I have taken efforts in this project. However, it would not have been
possible without the kind support and help of many individuals and
organizations. I would like to extend my sincere thanks to all of them. I
am highly indebted to the Principal Dr. Chandrasekhar V. Murumkar,
HOD Dr. Pawar J. K and Guide Dr. Niranjan Shah for their guidance
and constant supervision as well as for providing necessary information
regarding the project & also for their support in completing the project. I
would like to express my gratitude towards my parents & member of
financial statement Analysis of kind co-operation and encouragement
which help me in completion of this project. I would like to express my
special gratitude and thanks to industry persons for giving me such
attention and time. My thanks and appreciations also go to my friends in
developing the project and people who have willingly helped me out with
their abilities.

Miss. Ankita sham Borkar

3
CHAPTER NO. CHAPTERS PAGE NO.

TABLE OF CONTENTS

Executive Summery
01 Introduction
1.1 Introduction 9
1.2 Structure of banking system in
India
1.3 Company profile
1.4 Vision and Mission
1.5 Milestones
1.6 Products and services Bank of
Maharashtra
1.7 Areas of operations
1.8 Competitors Bank of
Maharashtra
1.9 SWOT Analysis
1.10 Achievements and
Award
1.11 Financial Statement

02 CONCEPTUAL BACKGROUND AND 23

LITERTURE REVIVE
2.1 Theoretical background o
f the study
2.2. Literature Review

03 RESEARCH METHODOLOGY 33
3.1 Introduction
3.2 Statement of problem
3.3 Objective of the study
3.4 Need of the study
3.5 Scope of the study
3.6 Research Methodology
3.7 Hypothesis

04 ANALYSIS AND INTERPRETATION 37

4
 Analysis and interpretation

05 FINDINGS, SUGGESTIONS AND 46

CONCLUSION
5.1 Finding
5.2 Suggestions
5.3 Conclusion

BIBLIOGRAPHY
ANNEXURE

LIST OF TABLE

TABLE NO. TITLE PAGE NO.

5
4.1 Table showing the percentage of NPA 38

4.2 Table showing the percentage of gross 39

NPA

4.3 Table showing the advances 40

4.4 Table showing the performance of 41

provision for NPA

4.5 Table showing the performance of 42

cash recovery in NPA

4.6 Table showing the performance of 43

assets quality

4.7 Table showing the percentage of 44

capital adequacy ratio

4.8 Table showing the sector-wise credit 45

Deployment and NPA

LIST of GRAFH

6
GRAPH NO. TITLE PAGE NO.
4.1 Graph showing the percentage of net 38
NPA

4.2 Graph showing the percentage of gross 39

NPA

4.3 Graph showing the advances 40

4.4 Graph showing the performance of 41

provision for NPA

4.5 Graph showing the performance of cash 42

recovery in NPA

4.6 Graph showing the performance of 43

assets quality

4.7 Graph showing the percentage of capital 44

adequacy ratio

4.8 Graph showing the sector-wise credit 45

Deployment and NPA

7
 EXECUTIVE SUMMERYT

The India Banking sector accounts a major portion of financial intermediation and
acknowledged for formulation of monetary policy and facilitator of payment system.
Bank of Maharashtra start was registered on September 16, 1935 with a capital of 10
lakh. I commenced business in February 8, 1936. The bank was nationalized in 1969.

8
The present chairman of Bank of Maharashtra is shri. A.J.Rajeev. Bank of
Maharashtra has head office situated at shivaji nagar in pune. Banking system in
India is totally headed by the Reserve Bank of India (RBI).

 TO Study the status of non-performing assets in bank of Maharashtra.

 To understand the commission of the Bank of Maharashtra.
 Net profit grew by 42% to RS 550 corer.
 Gross Advances Increased by 13%.
 Net Advances Increased by 18%.

9
 CAPTER 1

INTRODUCTION

10
 A bank is budgetary establishment that provides saving money and monetary
administration to their customers. It’s a monetary intuition that takes money from
people and provides credit. It also performs provide activities directly or indirectly
through capital market.

There are additional non managing accounts in the organization that leads to a few
money administrations without accepting the legal of a bank. And A bank is a group
related to money industry.

The Indian banking sector is maintained by RBI act of 1934. The BANKING
REGULATION ACT 1949 by issuing direction to the maximum number of deposits, and
the period and the rate of interest they could offer on the deposits accepted. India
reserve bank, providing different rules and guidelines, policies and notification on
time to time to control the banking industries.

The organized system is well developed that it can compete with its international like
in terms of modern technology, financial products and services, Profile, Planning and
professional.

While closing its books for an accounting year. A bank takes credit for interest
accrued on term loans, cash credit, overdraft, and bill discounted etc. Is that the
income on NPA should not be recognized on accrual basis and should be treated as
income only when actually received.

An Asset becomes non-performing when it ceases to generate income for bank.

11
 Structure of banking system in India
Banking system in India is totally lead by the RBI, India has no central bank before
the formation of RBI. The RBI is known as a leading monetary and banking control in
balance the banking section in India. It’s also known as reserve bank has it hold all
the reserve of all the commercial banks.

The Indian banking segments is generally divided into scheduled and

RBI

Scheduled Unscheduled

Bank Bank

Commercial CO-Operative

Bank Banks

Public Sector Private Sector Foreign Sector Regional Rural

Bank Banks Banks Banks

SBI and associate

Banks

Other

Nationalized

Banks

Other Public

Sector Banks 12
Unscheduled banks. All banks include in the 2 nd scheduled to the Reserve bank of India act,
1934 are scheduled banks. These banks include scheduled trading bank and co-operative
bank.

Company profile
Bank of Maharashtra was registered on September 16, 1935 with a capital of RS 10
Lakh. It starts business in February 8, 1936. The bank was nationalized in 1969. The
present Chairman of Bank of Maharashtra is Shri and consists of Board of directors
under whom the banks function. Bank of Maharashtra has I’d head office situated at
Shivaji Nagar in Pune, which is known as lokmangal karyalay. Later on in the year
1946, it entered into Karnataka and started its first branch in Hubli.

Bank of Maharashtra attained autonomous Status in 1998. It has helped the bank in
providing more and services with clear procedures without interpose of
Government. Apart from providing loans, banks also offer personalized services to its
customers. The bank also cares to its employees and provides many facilities &
schemes to them. Bank of Maharashtra has also come up with its shares in the
market which is on a slower growth towards progress.

Vision
To be a bright, forward looking, developer, customer centric bank serving diverse
section of the society, deepen shareholders and employees value while moving
towards global company.

Mission

 To ensure quick and efficient response to customer expectations.

 To innovate products and services to cater to diverse section of society.
 To adopt latest technology on a continuous basis
 To build proactive, professional and involved workforce.
 To deepen shareholders wealth through best practices and corporate
governance.
 To enter international arena through branch network.

13
Our Logo

The Deepmal

With are many lights rising to greater heights.

The Pillar

Our institution-symbolizing strength.

The Diyas

Our branches- Symbolizing service.

The 3 M’s symbolizing

 Mobilization of money
 Modernization of Methods and
 Motivation of staff

Turning point in the journey for nation building:

Registered on 16-09-1935

1936: start operation on 08-02-1936 in Pune.

1944: Status as Scheduled Bank obtained.

14
1946: Deposits crossed RS One crore marks. Formed fully owned secondary, The
Maharashtra Executor & Trustee Company. First branch outside Maharashtra
opened in Hubli.

1969: Nationalized along with 13 other banks. Entry in Delhi by opening Karabagh
branch on 19-12-1969.

1974: Deposit based crossed RS 100 Crore mark.

1976: Marathwada Grameen bank, first RRB established on 26-08-1976.

1978: New Head Office building being by good Prime Minister of India Shri Morarji
Desai Deposits crossed the figure of RS 500 crores.

1979: Marathwada Agriculture Research and rural Development Foundation

registered as a public trust, was established for undertaking research and extension
work and to provide more extensive service to farmers.

1985: 500th branch in Maharashtra state was opened at the hands of the then prime
minister, Mrs. Indira Gandhi at Nariman point, Mumbai. First Advanced Ledger
posting machine was installed at the branch. Golden Jubilee year celebration
launched at the hand of Dr. Manmohan Singh, Governor Reserve Bank of India.

1987: The 1000th branch of the Bank was begin at Indira vasahat, Bibwewadi, Pune at
the bright hands of Dr. Shankar Dayal Sharma, the honorable vice president of India.

1991: Mahabank farmer Credit Card was launched.

1995: Diamond jubilee Celebration Dr. C Rangarajan the RBI Governor was the chief
guest.

2000: Deposits crossed RS 10,000 crore marks.

2004: Public issue of shares -24% owned by public. Listed in BSE and NSE.

2006: Crossed total business level of RS 50,000 crore. Branch CBS project started.

2009: Entered into 75th year of dedicated service to the nation. Adopted 75
underdevelopment villages for integrated overall development.

2011: First SHG branch opened in Pune.

2012: Bank total business crossed RS 1, 50,000 crore and reached the level of RS 1,
51,320 crore.

15
2016: Bank crosses turning point figure of RS 2.50 lakh crore tools NAHASECURE- add
on application for internet banking.

2019: Bank was launched on various social media platforms like Facebook, Twitter,
LinkedIn, You Tube and Instagram & Pinterest.

2021: Bank crossed turning point business figure of RS 3.00 lakh crore.

PRODUCTS & SERVICES OF BANK OF MAHARASHTRA:

Bank of Maharashtra offers a different range of service to its clients such as

 Education Loan

It is giving to students to wish to study in India or abroad. The student

should be an Indian citizen. He should have secured a seat through an
entrance test or merit basis selection. The rate of interest for his loan is
10.25%.

 Housing Loan

The purpose of this loan is to build house, purchase a house or make

repairs to the existing house. There is no maximum limit for urban areas.
But for rural areas it is 15 lakh. The rate of interest is 9.25%.

 Vehicle loan scheme

No loans are to be made on vehicles beyond three years old unless

additional collateral is used. A physical inspection must be made on all
used vehicles except those purchased thought a reputable dealer. A
security agreement will be taken on all vehicles. The rate of interest up to
3 years 9.17% and above 3 years is 10.75%.

 Consumer Loan
Each loan request must be accompanied by a completed loan application.
The last credit report is over one year old, a credit report is mandatory.
The rate interest is 13.5%. The maximum amount is RS 1.50 lakh. Charged
by the bank is 1% of loan.

16
  Loan for Agriculturists
Following are the various scheme offered to agriculturists
1. Mahabank kinas credit
The purpose of this skill is to tend the crops, meeting the short
term credit need of farmers for crop production and maintenance
of farm furniture. The security taken is suppose of crops/asset or
title of land. Under this scheme insurance of given to crops.
2. Minor stream for Agriculturists
The amount given as per NABARD unit costs. Hypothecation of
movable assets or debt of land is taken as security. The repayment
period is 7 to 11 years.
3. Scheme for financing farmers for purchase of land the eligibility of
this scheme is small, marginal or tenant farmers. The maximum
amount given is 15 lakhs. The repaying period as per the capacity
of the borrower or incremental income.
4. Hi tech project
Agriculturists should have knowledge of advance techniques of
farming. The purpose is for hi tech project. The amount as per
project cost. The security asked is hypothecation of goods or
collateral security. The repayment period is 6 to 8 year.

 Loans for MSMEs

Amount Rate of Interest

Up to 25 lakh 9.25% p. a
25 lakh to 1 crore 10.25% p. a
Above 1 crore 11.25% p. a

Collateral free loan up to 10 lakhs is given. The loan is offered to Micro,

Small and Medium enterprise.

 Solar Loan
The purpose of this loan is to install solar home systems for domestic and
commercial use. The maximum amount given for domestic users is RS
25000 and for entrepreneurs is RS 2,00,000. The rate of interest is 12.5%.

 Personal Loan

17
 The purpose is to meet the personal expenses. The maximum amount is
RS 1.50 lakhs. The rate of interest is 14%. The processing fee charged is
1% of loan amount. The eligibility is salaried of professional.

Credit Facilities

 Cash Credit & Overdraft

A cash credit or overdraft account will be treated as NPA if the account
remains out of
order for a period of four quarters during the year ending 31 st march,
1993. Three quarters during the year ending 31st march 1993.

 Term loans
These are commercial loans. A term loan will be treated as NPA of
interest remains past due for period of four quarters as on that date.

 Bill discounting
The bank buys a bill i.e., the bills discounted account should be treated as
NPA if the bill remains overdue and unpaid for a period of four quarters.

Area of Operation
It has the largest network of branches of any nationalize bank in the state of
Maharashtra. The total business of the bank crossed RS 2,66,000 lakh crore as on 3
December 2020. The bank had 15 million customers across the country with 2001
branches as of December 2021. Bank of Maharashtra is a nationalized bank under
the ownership of Ministry of Finance, Government of India.

Competitors of Bank of Maharashtra

Some major competitors:

 Union Bank of India

 Syndicate Bank
 Indian Overseas Bank
18
 Bank of Baroda
 Bank of India
 Andhra Bank
 Canada Bank
 Punjab National Bank

19
SWOT ANALYSIS

It is a vital tool to know and to take decision for all the crises in the
business and company, SWOT asses the strength, shortcomings,
openings and dangers required in a business. It also advances
conditions inside and outside the bank.

20
STRENGTHS

 Bank of Maharashtra has a strong market lead position in the regional banks
industry.

 Deep products present have helped the company to penetrate different

customer section in regional banks segment.

 Bank of Maharashtra products have strong brand recognition in the regional

banks industry.

 It provides exhaustive product mix option to its customers.

 This has enabled the company do develop a diversified revenue stream past
financial sector and regional banks segment.

 Large customer base with over 1500 branches in 23 states and 2 union state.

WEAKNESS

 It can lead to salaries to maintain the skill within the firm.

 Gross Margins and Operating Margins which could be improved and going
forward may put force on the Bank of Maharashtra financial statements.

 Industry in the regional banks industry is putting downward pressure on the

profitability.

 Business model of Bank of Maharashtra by the competitors in the regional

banks industry.

 The NPAs of the bank have been increasing.

21
OPPORTUNITIES

 The low inflation rates bring more balance in the market, enable credit at
lower interest rate to the customers of Bank of Maharashtra. This will
increase the growth of Bank of Maharashtra
.
 Bank of Maharashtra has to carefully monitor not only broad trends within
the regional Bank industry but also in the wider financial sector
.
 Book with local players can also provide time of growth for the Bank of
Maharashtra in international markets.

 As the US economy is improving faster than any other developed economy it

will provide Bank of Maharashtra an opening to expand into the US market.

THREATS

 Trade relation between US and China can affect Bank of Maharashtra growth
plans- this can lead to full scale trade war which can hamper the potential of
Bank of Maharashtra to expand operations in china.
 Growing technogioes expiration of local players in the export market –One of
the biggest threats of tie up with the local players in the export market for
Bank of Maharashtra is threat of losing IPR.

 The biggest challenge for Bank of Maharashtra and other players in the
industry is the increasing material of the product in financial industry.

ACHIEVEMENTS AND AWARDS

 Bank of Maharashtra won the ‘Best IT Risk & Cyber security Initiatives’
Award 2021.
 Bank of Maharashtra won the ‘Best Fintech adoption’ Award 2021.
22
 Bank of Maharashtra receives 1st position Utkarsh Award for achieving 1st
highest percentage of digital payments transaction. (category : small &
micro bank)
 Bank of Maharashtra receives Outstanding Banking partner Award for
MSMEs by zee business.
 Bank of Maharashtra ranked first under top improvers category.
 Bank was conferred as BEST BANK-PUBLC SECTOER in BFSI Award by 2015
by World HRD congress recognition of the best performance in banking
category.
 Bank has bagged two powerful awards in the 11 th banking technology
quality award 2014-15 organized by IDRBT (Institute for Development and
Research in banking Technology- Established by RBI)

23
 FINANCIAL STATEMENTS BANK OF MAHARASHTRA

BALANCE SHEET

CAPITAL AND LIABILITIES

As On 31-03-2021 As On 31-03-2020

Capital 6560,15,89 5824,10,93

Reserve & Surplus 5573,02,02 4931,17,01

Deposits 174005,61,91 150066,40,46

Borrowing 4238,75,12 3670,03,18

Other Liabilities & 6287,46,35 4375,46,66

Provision
Total 196665,01,29 168867,18,24

ASSETS

Cash and Balance with 12882,48,23 10353,68,49

Reserve Bank of India
Balance with Banks, 59,24,85 93,28,22
Money at call &short
notice
Investment 68111,64,45 57740,85,12

Advances 102405,16,68 86871,65,09

Fixed Assets 1674,00,23 1676,19,16

Other Assets 11532,46,85 12131,52,16

Total 196665,01,29 168867,18,24

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 CHAPTER-2

CONCEPTUAL BACKGROUND AND

LITERATUREC REVIEW

25
THEORETICAL BACKGROUND OF THE STUDY

Meaning of Non-Performing Assets:

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

Definition of non-performing assets:

 If the bills obtained or marked down, the bill stays past due for a longer
period such as over 90 days.
 If an overdraft or cash credit propels, the record as a stay of ‘out of request’
of an money credit, if the wonderful modify remains wealth of two extent
attracting impact as far drawing the power in each status where the
outstanding change in the necessary working records.

NPA came into Indian financial system with the introduction of cost-effective
account standard. A benefit, which include a rented resources, which turns into non -
performing when it as stop to product salary to the bank such Non-performing asset
may have mostly mark credit deficiency, which chance the liquidation of the
obligation and depicted by unmistakable probability that a bank would support same
adversity, if the needs are not balanced properly.

Steps were taken to measure the borrowers account when the borrower re pays the
remarkable interests and segment. In like different manner with the focal point are
additionally named as-

 Non-performing assets
 Performing assets

A Non- performing resource was described as a credit office in aspect of which the
interest as well as segment of necessary has positioned as past due for a
predetermined time allotment.

The issue of NPA Is not upset the bank even its control the whole economy and the
size of banking industries is comparatively more in public domain bank. A NPA is
directed loan system in commercial bank were it need 40% of credit level to its
priority sector in the financial system.
26
The RBI Guideline
To protect the banks and financial institutions the RBI sets certain Guidelines that
are-

 Bank should have their allow standard for their internal monitoring of their
various accounts.
 They have to follow the FDCI and the classes of assets.
 The management has to be effectively enough and open in operating its
conditions as aspect in impact borrowing.
 If the longer period, then arises a dally in the payments of accounts and the
assets
 There should be an suitable loan certification to the auditors and the financial
institution with the need of the bank.

NARASIMHAM COMMITTEE-FIRST REPORT HIGHLIGHTS

 Classification of assets return performing and non- performing assets (loss

assets and substandard doubtful) and on NPA which will not be recognized.
 The head sector which defined and give bank finance to be regulated to 10%.
 CRR and SLR to be decreased.
 Banks have to fulfill capital ability of 8% by 1997 of Risk weighted assets.
 The uniform accounting practices on income found the asset classification
and it’s providing.
 Merger and purchase of bank to 10 national banks, local banks, and
international and rural banks.
 Formation of assets and its reconstruction of funds.

NARASIMHAM COMMITTEE- SECOND REPORT- HIGHLIGHTS

 Capital ability has been raised from 8% to10% in this stage.

 Introduce the income recognition norms of 90 days in phased manner.
 2/3 larger banks with book ups along both international odirection,8-10
national banks and local banks.
 Reconstruction of assets companies have been set up to issue bonds which
would from part 2nd level capital.
 The planned decisions are identified and provide profitable to the customers.

27
The effects of NPAs
The default of primary premium contracts the income to the money lender which
will bring about after of the plans and abatement the financial profit.
NPA reduce earing capacity if the assets. The money blocked in NPA can’t be save for
future use. In simple words, NPAs reduce advances turnover constantly affects the
potential profits.

Problems affected by NPA

 Non-performing loans will lead to bad investments some time. The credit
may be rejected from the different good project due to which it won't receive
the failed project.
 The banking sector may tell by the NPA and might lead to the economic
disturbances.
 A high wrathful of interest and deposits rates may be charged by the bank
to re- distribute their losses and the economic growth is being suffered by the
financial markets.
 There is fear of NPAS demoralize the operating staff. Sometimes the staff
becomes more close and strict in handling the advances resulting
 There is fear of NPAS demoralize the operating staff. Sometimes the staff
becomes more close and strict in handling the advances resulting to the
problems to genuine client.

Causes for NPAs in bank are:

An account doesn't turn into an NPA overnight. It indicates the in sufficiently balance
in the loan where it had to take provision to avoid the dues of the record into NPA
sector. An inside view taken by the RBI tells that the request of unmistakable quality,
the following factors added to the NPAs are

INTERNAL FACTOR

 Product recentness.
 Poor credit consideration, improper SWOT investigation with respect to the
bank
 Time period and cost rates are over falling to pieces during the project
implementation.
 In-efficient management of loan.

28
EXTERNAL FACTOR

 Rising of price.
 Input or power imbalance.
 Economic decline.
 Movement of exchange rates.

Concept of NPA

NPA or Non-Performing Asset is those kinds of loans or advances that are in

default or in balance. In other words, these are those kinds of loans wherein
principal or interest amount are late or have not been paid. These are also
the kinds of loans where the lender considers the loan agreement to be
broken and the receiver of the loan is unable to pay back the loan amount..

NON-PERFORMING ASSETS:

The non-performing asset is a asset were the re-installment of principal and interest
rates in the loan account are abnormal or overdue is known as NPA.

ASSETS CLASSIFICATION:

According to the guidelines of RBI, bank must classify their assets on a non- going
basis. The loan accounts have been classified into 4 categories as shown below.

Standard Assets:
It is a kind of performing asset which creates continuous income and repayments as
when they become due. These assets carry a normal risk and are not NPA i the real
sense of the word. Therefore, no special provisions are required for standard assets.

Sub-standard Assets:
Loans and advances which are non- performing assets for a period of 12 months, fall
under the category of sub-standard assets

Doubtful Assets:
The assets considered as non- performing for a period of more than 12 months are
known as Doubtful Assets.

29
Loss Assets:
All those assets which cannot be recovered by the lending institutions are known as
Loss Assets.

Types of NPA:
The various types of NPA are

 Gross NPA

 Net NPA

Gross NPA:
Gross NPA stands for the Gross Non-Performing Assets. Gross NPA is the termed
used by commercial banks that refer to the sum of any unpaid debt, which is
classified as non-performing loans. Gross NPA is the total of the principal and the
interest to be paid on it.

Net NPA:
Net NPA stands for the Net Non-Performing Assets. Net NPA is a term used by
commercial banks to show less allowance for poor and pending debts than the
amount of non-performing loans.

Measurements taken against NPA are

 The standard assets should be process directly.

 The major center should be on the possibility then the classification.

 The bank should lend loans with care.

 Credit assessment skills have to be improved.

 There should be start against dues

.

Recovery measures of NPA

30
There are various measures to be taken for the recovery it should be well planned by
the NPA management areas

 Non-legal measures:
The certain compromises that is critical requirements for the recovery of the
amount due for the period. The bad debts are considered as legal. Process in
loans. The study has been detail in terms of future gains and quick loss with
the effective development decisions has been turn up.

 Legal measures:
There are various features, which has no stamp duty payable, the recovery
has to be quick. The reports regarding should be submitted on given time
period related to the operation.

Literature Review

Chatterjee C. (2012)
He attempt to focus on the problems and dispute of NPAs, approach which are
orders towards RBI, activities of central government, situation of NPAs area wise and
banking sector wise were it at long last corrective measures for NPAS in India. His
article which has made on a comparative statement of NPAs of public & private part
banks and international banks, while it has additionally undertake to understand the
connection between NPAS net benefits and credit recovery of NPAS by various ways.

Maher (2017)
In his article he has mainly on how devalue has impacted the most central issues of
keeping traditional banking industry and digital banking sector. The short run of cash
which has effect of demonetization can been a vast problem in the levels of NPA on
bigger plate level due to this he concentrated the current information which is
available on day today newspapers but it has right NPA level for a more drawn out
run period which he has foreseen. A present moment towards beneficial outcomes
of demonetization can be found in the present NPAs.

Piyush and Goyal (2017)

Both of them as focused on the study were the analyses of NPA, net NPAs
furthermore, net NPAs of 10 banks in India where it has to be seen in the
31
relationship between net NPAs, net profits likewise gross NPAs. The actual point
which had been look into was to separate the yearly reports of 19-8 banks were to
see the situation of NPAs in the nations. The study that concludes the NPAs are more
in public division banks when it compares to private division banks

Ponvannan. S. (2011)
He stated that the NPA issues which causes problems and measures are taken to
conclude the bathe bank has to undergo a major changes and challenges in the 1st
phase of economic modernization since it’s the important credit management which
has been come out in current trending time banks are were taken provision
regarding to extend the loans, which causes the stay of NPAs.

T.R. Gurumoorthy (2012)

Discussed that NPA of public sector banks can be reduced by reviewing loan
application on the basis of 5 C's. Here 5 C's denotes capacity, collateral, condition,
capital and character of borrower.

Kaur K. And Singh B. (2011)

In their study on non-performing assets of public and private sector banks ( a
comparative study) studied that NPAs are considered as an important limit to judge
the performance and financial health of banks. The level of NPAs is one of the drivers
of financial stability and growth of the banking sector.

Singh A. (2013)
In her study conclude that NPAs are the important performance indicator of banks. A
large number of defaulted borrowers indicate a high level of NPAs. The high level of
NPAs negatively affects the efficiency and profitability of banks. No bank can make
NPAs zero. The bank should finance the creditworthy borrowers. She also suggested
that mass yield of loans should be restricted as it gives a wrong signal to borrowers.

Baijal A. (2015)
In this paper she discusses systematic reasons behind the high number of NPAs in
agriculture and what may be the suggestions thereof. The problem of NPAs could
not be fully resolved by surplus means like farm loan yield etc. It should be tackled
by using new technology and machines which really help in reducing NPAs.

Shanabhogara Raghavendra (2018)

32
This paper analyzed the impact of the NPA, causes of NPA, and consequences of NPA
in a commercial bank. This study suggested that restructuring of the bank or financial
organization, improvement in financial depending and modernization of appropriate
skill for up gradation of credit wordage and one more thing is staff efficiency, these
are a most important thing to solve the present defaulters system in India and world
too.

Sengupta and Bhardhan (2017)

Argued that regulatory resignation does not facilitate resolution and can actually
worsen the banking pinch by providing incentives to the banks to defer NPA
recognition and delay action. Restructuring of a loan should be the commercial
decisions of a bank and should not automatically qualify for regulatory concessions
in terms of deferment of recognition of NPAs.

Vivek Rajbahadur Singh (2016)

This research paper found that NPA is just not only problem for the banks but for
economy too. It studies the status of NPAs of Indian scheduled commercial banks in
India. It also studies the impact of NPAs on banks and also known the recovery of
NPAs through various channels. It also gives suggestions to keep away from future
NPAs and to manage existing NPAs in banks.

Rana C. (2018)
In his study titled Management of NPA in factors of Indian banking system concluded
that NPA impacts profitability, liquidity and results in credit loss. There are two types
of NPAs – gross NPA and net NPA. NPA also impact low submits on advances adverse
impact on capital skill. As a insurance measure, he suggested stopping multiple
financing and early recollection of the problem.

Harani Subramanian Mutyala (2019)

Their investigation indicates that NPAs problem is a very serious concern and it’s an
endless contest in India because it destroys the sound financial position of them. This
problem has to be addressed in such a way that it should not impact on the financial
position and image of the bank. This study analysis the sector wise classification
NPAs and loan assets of public and private sector banks. It also examines the gross
NPAs, gross advances and gross NPAs of public and private sector banks in India.

33
Rishabh Adey Deevanshu Yash Goyal, MD. Nizam Siddiqui, Lata dhruw
(2020)
This study found that NPAs clear the bank’s capital and weaken its financial power.
Public useful banks are more on the NPAs basis relative to private sector banks. The
bank and financial institutions should be more constructive in pursuing a realistic and
systematic strategy of NPA management where priority is given to determent of
NPAs. Public sector banks must be wary in preventing any account being NPAs by
effectively taking all right insurance steps.

Selvam P. And Premnath S. (2020)

In their study titled Impact of Coronavirus on NPA and GDP of Indian Economy finds
that the NPAs increased during the period and suggested that government should
rule pending cases fast and stop mandatory landings which are the real problem

34
 CHAPTER NO -3

RESERCH MOTHODOLOGY

35
Research Design:
Research design use the research is exploratory in nature. The researcher intends to
study the NPA in Bank of Maharashtra under the case study analysis.

Statement of the problem:

The core intention of Commercial banks failing because of raising NPA and a threat
to its profitability.

Following are the question raised for the purpose of study:

1. What are reasons for increases NPA in Bank of Maharashtra.

2. What is the effect of NPA on the operational profit in Bank of

Maharashtra.

3. What is the provide status during the NPA position the bank have the
present time.

4. What are the challenges the bank is overlook to reduce their NPA

Objectives of the study:

The major objectives of the present research are under the

Following heads:

 To study the status of non-performing assets in Bank of Maharashtra.

 To understand the concept of NPA and the difference of assets classification

by the bank.

 To study reasons for increases NPA in Bank of Maharashtra.

 To study challenges facing by bank to reduce their NPA.

 To study effect of NPA on profitability of Bank of Maharashtra.

 To go through the insurance and size taken by the bank to avoid NPA.

36
Need of the study:

 To study the what are the role of NPA in banking sector.

 To make level of NPA.

 To understand the steps taken to regulate NPA by Indian Banking sector.

 To understand the commission of the Bank of Maharashtra.

 To know the methods adopted by RBI for management of NPA and factors
affecting NPA levels.

Scope of the study:

 Study purely different policy begins by the bank to avoid the NPAs.

 Study obtains the NPA in Bank of Maharashtra and it overall impact on the
bank performance.

 Study depends on the data given by the bank and its sites.

Research Methodology:
To fulfill the given objectives, data have been collect from different sources and it’s
included:

 The research is basically found on secondary data were it’s in descriptive

analysis, and the sources of the data.

 The information is obtained from the research reports, published articles

related to NPA.

 The statistical information on NPA, bank direct and economic mark have
been allow mainly from RBI and Bank of Maharashtra websites, annual
reports and other publications.

37
HYPOTHESIS

 Specification of a conceptual approach to business that denotes a

combination of model variables (input and output)

 There is statistically significant negative correlation between market share of

individual banks and their efficiency scores in the Baltic market.

 There is a statistically significant negative correlation between market

concentration and the efficiency of individual banks in the Baltic market.

38
 CHAPTER NO 4

ANALYSIS AND INTERPRETATION

39
4.1 Table showing the percentage of net NPAs

Years Net NPA Gross Percentage

NPA
March 2020 4,145.38 12,152.15 34.11
March 2021 2,544.32 7,779.68 32.70

Graph 4.1: showing the percentage of net NPA

18,000.00
16,000.00
14,000.00
12,000.00
10,000.00
8,000.00 Percentage
6,000.00 Gross NPA
net NPA
4,000.00
2,000.00
0.00
31/03/2021 31/03/2020
Axis Title

Analysis:
In the above information we can see that the net NPA over gross NPA is 34.11% in
the year 2020 and it was declined to 32.70%.

Interpretation
Again, it has been raised by 4.36% in 2020 this show the in stability in the net NPA
year by year. Again, it has declined by 1.41% in 2021.Since the bank is advised to
maintain the constant in the upcoming year.

40
4.2 Table showing the percentage of Gross NPA.

Gross NPA = Gross NPA/ Gross Advance *100

Years Gross NPA Gross Advance Percentage

2019-2020 12152.15 94864.01 12.81%
2020-2021 7779.68 10760.76 7.23%
Graph 4.2: Showing the percentage of Gross NPA
120000

100000

80000

Gross NPA
60000
Gross Advance
Percentage
40000

20000

0
2019-2020 2020-2021

Analysis:
The analysis of table tells the Gross NPA over Gross Advances

In the year FY 2020 was 12.81% in 2021 7.23%.

Interpretation:
After analysis from the above table it’s clear that the gross

NPA and gross advances is decreasing when compared to

Previous years. Since bank advice to maintain same continuous

In the upcoming year.

41
 4.3 Table showing the advances

Year Advances

2019-2020 86871,65,09
2020-2021 102405,16,68
Graph 4.3 showing the advances

Advances
1050000000

1000000000

950000000
Advances
900000000

850000000

800000000

750000000
2019-2020 2020-2021

Analysis:
From the above table its shows that the advances are increasing year by year

Interpretation:
After the analysis from the above graph the advances are increasing from FY 2020
and to 2021. Hence it shows that the bank performance is better year by year later if
the advances are take down the value of NPA will decline

42
4.4 Table showing the performance of provision for NPA

Years Provisions

2019-2020 295294
2020-2021 221379

Graph 4.4: showing the performance of provision of NPA

350000

300000

250000

200000
Provisions
Series2
150000 Series3

100000

50000

0
2019-2020 2020-2021

Analysis:
From the above table it shows the provisions made by the decreasing for certain
extend.

Interpretation:
After the analysis from the above graph, it has been decreased towards 2020, again
it has been decreased in 2021 hence it should keep this is bad sign for the bank.

43
4.5 Table showing the performance of cash recovery in NPA

Years Cash Recovery

2019-2020 1754.95
2020-2021 2647.19

Graph 4.5 showing the performance of cash recovery in NPA

3000

2500

2000

Cash Recovery
1500
Series2
Series3
1000

500

0
2019-2020 2020-2021

Analysis:
From the above table the cash recovery in NPA has been unstable by the Bank of
Maharashtra.

Interpretation:
After the performance of the bank is decreased in cash recovery of the assets in the
FY 2020. In the FY 2021 performance of bank is take down in cash recovery, which
is an unrealized assets become standard asset constantly.

44
 4.6 Table showing the performing of assets Quality

March 2020 March 2021

Standard Assets 82737 99874
Sub- standard Assets 3845 1790
Doubtful Assets 7944 5513
Loss Assets 364 476

Graph 4.6 showing the performing of assets quality

120000

100000

80000

60000 Mar-20
Mar-21
Series3
40000

20000

0
Standard Assets Sub- standard Doubtful Assets Loss Assets
Assets

4.7 Table showing the percentage of capital adequacy ratio:

45
 Years Capital Adequacy Ratio
2019-2020 13.52
2020-2021 14.49

Graph 4.7: showing the percentage of capital adequacy ratio

14.6

14.4

14.2

14

Capital Adequacy Ratio

13.8
Series2
Series3
13.6

13.4

13.2

13
2019-2020 2020-2021

Analysis:
As every bank needs to have capital reserve to compensate its NPA. Like that above
table shows capital adequacy ratio this have been vary yearly.

Interpretation:
The clear analysis says that the percentage of capital adequacy ratio which is
showing increased result as shown in the above graph.

4.8 Table showing Sector- wise Credit Deployment & NPA

46
Sectors MARCH 2021
Advance Sector NPA Sector NPA
(%)
Agriculture 16,202 3,450 21.29
Retail 28,651 682 2.38
Micro & Small 21,612 2,278 10.54
Sub Total (A) 66,465 6,410 9.64
Medium 1,521 129 10.45
Large 39,668 1,241 3.13
corporate &
Other
Sub Total(B) 41,188 1,370 3.33
TOTAL 1,07,654 7,780 7.23

Graph 4.8 showing sector-wise credit Deployment and NPA

70,000

60,000

50,000

40,000
16,202
3,450
30,000 21.29

20,000

10,000

0
Retail Micro & Small Sub Total (A) Medium

47
 CHAPTER 5

FINDING, SUGGESTIONS AND CONCLUSION

48
Findings

 Net profit grew by 42% to RS 550 corer.

 Gross advances increased by 13%

.
 Net advances increased by 18%.

 Gross NPA declined to 7.23% as against 12.81%.

 Net NPA declined to 2.48% as against 4.77%.

 Provision coverage ratio improved to 90% as on 31-3- 2021 as against 84% as

on 32-3-2020.

 During the quarter Bank made Covid-19 provision of RS 508 crore. Bank holds
cumulative Covid-19 provision including interest of RS. 753.47 corers.

 Bank of Maharashtra continues to remain the top players in Digital Banking

space among its peers.

 Bank has entered into a co- lending (Digital lending agreement with non-
banking financial company for MSME loans.

49
CONCLUSION

 The issue regarding non-performing assets has been major Issue for banking
sector in India.
 The Reserve Bank of India given the guidelines and norms to Bank of
Maharashtra to regulate the decline of NPA.
 The analysis of NPA about reference to Bank of Maharashtra has various, to
research beyond the conditions of the non-performing assets and that effect
in the commission of the bank.
 Over the range in the undertake usually NPAs have more impact in the
evolution in the action of all monetary foundation effecting their benefit in
the report.
 It finally affects their benefit’s however, it can be seen in this bank also it try
out its maximum to decline its NPAs and also taking a good provision towards
its reason also.
 Bank of Maharashtra is the public sector Bank where more than 50% of
shares are belong to government of India.

50
BIBLIOGRAPHY

51
ANNUAL REPORTS of

The annual reports of Bank of Maharashtra from the period

2019 to 2021.

REFERENCE

1. Baijal, A. (2015) High ratio of agriculture NPA`s in priority sector lending by public
& private banks in India – Reasons suggestions and discussions. IISR Vol. 4 – Issue –
4, April 15 www IJSR.net, Paper – 10, ISSN (Online): 2319-7064, India ______ value
(2013): 6.14/ Impact fact ___ 2013:4.438

2. Singh, A. (2013). Performance of Non- Performing Assets in Indian commercial

banks, International Journal of Marketing, Financial Services & Management
Research, Vol.2. No.9, pp. 86-94.

3. Kaur, K & Singh, B, Non-Performing assets of public and private sector banks, A
comparative study, South Asian Journal of Marketing and Management Research,
Vol.1, Issue 3, 2011.

4. Harani. B, Subramanyam Mutyala. (2019), A comparative Analysis of Non-

Performing Assets (NPAs) of public and private sector banks in India – An Endless
Battle. IJSTR Journal, Volume No.08, Issue No.12.

5. Singh Vivek Rajbahadur. (2016) A study of Non-Performing Assets of Commercial

Bank and its recovery in India. Annual Research Journal of SCMS, Volume No. 4.

6. Shanabhogara Raghavendra, “Non-Performing Assets in Commercial Banks in

India: An Analysis”, International Journal of Research in Humanities, Arts and
Literature (IJRHAL), Vol.6, No.4, pp: 377-386, 2018.

52