An empirical study on npas in working capital loan of Gramya banks

Every business needs to some amount of working capital. The need for working capital arises due to the time gap between production and realization of cash from sales. There is an operating cycle involved in sales and realization of cash. There are time gaps in purchase of raw materials and production, production & sales and sales with realization of cash. Thus, working capital is needed for the purchase of raw materials, components and spares, to pay wages and salaries, to incur day-to-day expenses and overhead costs such as fuel, power and office expenses, to meet the selling costs as packing, advertising, to provide the credit facilities to the customers and for maintain inventories of raw materials, work-in-progress, stores and spares and finished goods. In this study we made an attempt to find out the intended factors those are responsible for the growth of nonperforming assets in Gramya banks only.