Banker's perception on NPA management: An opinion survey

The Government of India and the Reserve Bank of India have advised banks and financial institutions to take several steps for recovery of dues by evolving and implementation of recovery policy, compromise settlements through Settlement Advisory Committee and Monitoring and follow up of Non-Performing Assets (NPAs) at various levels in the banks. The banks have also been advised to use the forum of Lok Adalats for compromise settlement of their NPAs and guidelines have been issued by the Reserve Bank of India for making increased use of Lok Adalats to settle disputes involving outstanding balance in NPA accounts upto Rs.5 lakhs. Besides, Credit Information Bureau (CIB) is being set up to disseminate information on borrowers to the banks.

In spite of the overall growth in business of the public and private sector banks, particularly in advancing loan in much liberal manner, the number of defaulters is also increasing from time to time. So it seems highly important to have a study on the management of NPA in banking sector. Further for effective management of NPA both RBI and commercial banks have tried their best in putting different types of mechanism. NPA is not a challenge to the lender or supplier of fund rather than it creates a problem for those farms who seek the financial help of banks for their short term as well as long term financing. So NPA creates an unhealthy atmosphere of lack of trust, which minimises the credit facilities, availed by different sectors of the society. As a result adverse impact of NPA falls upon the national income in general and state income in particular. So in micro level the growth rate of various sectors of economy slows down which encourage the unemployment problem for the society. On the basis of the above mentioned facts the proposed study is highly important for proper assessment of NPAs and conduct opinion survey of bank employees in five districts of Odisha through structured questionnaire.