Trend of NPA in Co operative Banks

FINDINGS
1. Agricultural Loan shows a slightly decreasing trend in NPA over the five years under
study. However on an average 14.93% of the Agricultural Loan sanctioned was overdue
every year.
2. Gold Loan shows a stable trend in NPA over the five years under study. The average NPA
in Gold loan is 5%.
3. Swarnajayanti Gram Swarozgar Yojana shows a slightly increasing trend in NPA over
the five years under study. The average NPA in S.G.S.Y Loan is 9.24%
4. Revolving Fund Loan shows a slightly increasing trend in NPA over the five years under
study. The average NPA in S.G.S.Y Loan is 12.33%
5. Deposit Loan shows a slightly decreasing trend in NPA over the five years under study.
The average NPA in Deposit Loan is 9.57%
6. National Mortgage Guarantee (NHG) Loan shows a slightly decreasing trend in NPA
over the five years under study. The average NPA in NHG Loan is 12.10%
7. Diary loan shows a slightly increasing trend in NPA over the five years under study. The
average NPA in Diary Loan is 9.24%
8. The percentage of NPA is minimum in Gold Loans and Maximum in Agricultural Loans

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Findings, Suggestions and Conclusion

SUGGESTIONS
1. The percentage of NPA in Agricultural loan is decreasing but relatively high in its
category. Stringent measures should be taken to reduce NPL level in agricultural loan.
The NPA in Agricultural Loan should managed below 10% level.
2. The NPA percentage in Gold loan is stable but relatively high among its category. It
should brought down to a level of 3% per anum
3. The NPA in S.G.S.Y loan should controlled around 7% or less
4. The NPA percentage in Deposit loan should be further reduced to less than 6% level
5. The average NPA in NHG loan is also high among its category. It should controlled
below 10% level
6. Diary loan NPA should be brought down to 7% level.
7. The overall proportion NPA of the bank is seems to high with industrial standard. Bank
should take stringent measures to reduce over dues in the coming years

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Trend of NPA in Co operative Banks

CONCLUSION
The agricultural loan is found to be the most risky loan of Co operative banks. The bank
will be forced to grand agricultural loan under the RBIs priority lending policy to encourage
agricultural development in the country. Some portion of the agricultural NPA can be realized
through the credit waiver scheme of the central or state government from time to time. How ever
bank should ensure that loans are utilized for the purpose for which it is is taken in order to
control its agricultural NPA to the minimum.
Gold loan is found to be the least risky loan of the Co operative banks. It is because of
easy realization of dues by selling gold in the open market in case of default. How ever gold
loans are mainly granted for unproductive purposes. Higher default will have negative image on
bank. So it should look into the purpose of the loan before granting.
To conclude NPAs are high in co operative bank compared to other nationalized banks. It
is mainly because it is catering to the needs of rural people where credit worthiness of the
borrower is very low. Granting loan on personal security is also a reason for higher NPA. Any
way professional management free from political influence is essential for the proper functioning
of the co operative banks.

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