Non Performing Assets (NPA) and its Provisions: in Urban Cooperative Banks.

Urban cooperative banks play a very important role in the Indian banking system. The main functions of banks are accepting deposits and lending money. Banks charge higher rate of interest on loans than the rate of interest which they give on the deposits. Banks accept the money from public in the form of deposits which are repayable on demand. Banks provide loans to the borrower from the deposits which they accept from public. Banks can return the money of deposit holders at any time when it has guarantee that the money which they have given as loan is refundable. But if the bank fails to receive interest on loan and principal amount of loan in time or has no guarantee of getting it back these assets are called as NPA. Any default in repayment of loan, will affect operational efficiency and financial health of the banks and ultimately causes threat for the depositors and the shareholders. So to avoid this, banks make provision from its profit against its NPA. This paper is an attempt to study Movement of NPA and provisions of NPA of ‘The Kalyan Janata Sahakari Bank ltd’.