NPAs are an inevitable burden on the banking industry. Hence the success of a bank depends upon methods of managing NPAs. The Public Sector Banks have shown very good performance over the private sector banks as far as the financial operations are concerned. The Public Sector Banks have also shown comparatively good result. However, the only problem of the Public Sector Banks these days are the increasing level of the non-performing assets.
1.INTRODUCTION Banking system is the backbone of any nation’s economy, so it is very important to have a system with the lack of failures. In the repid growth in the Indian banking system we also found growth in the bank scams in India. As the banks always deal with money, temptation is high for some of those associated with banks to find out loopholes in the system to make personal gains fraudulently. This is especially true for developing countries like India. "The banks are the lifelines of the economy and play a catalytic role in activating and sustaining economic growth, especially, in developing countries and India is no exception," S S Mundra, deputy governor of the Reserve Bank of India said in a speech recently.
The objective of these banks is to serve public interest rather than earning profits. Functions of Development Banks in India Development bank is vested with the responsibility of coordinating the working of institutions engaged in financing, promoting and developing industries, agriculture, housing, foreign trade, etc. the main functions of development banks are as
Requirements for Tier 1 capital and common equity will be 6% and 4.5% respectively. The liquidity coverage ratio will require banks to hold a buffer of high quality liquid assets enough to deal with the cash outflows faced in an intense short-term stress scenario. This is to prevent situations like a bank run. Leverage Ratio more than 3%: The leverage ratio is derived by Tier 1 capital divided by the bank 's average total combined
Banks play an important role in providing financial resources especially to capital-intensive sectors such as infrastructure, automobiles, iron and steel, industrials and high-growth sectors such as pharmaceuticals, healthcare. In emerging economies, banks are more than just agents of financial support, they carry the additional responsibility of achieving the government’s social agenda also. Because of this close relationship between banking and economic development, the growth of the overall economy is correlated to the health of the banking
The Bank is a financial institution that performs several functions like accepting deposits, lending loans, agriculture and rural development etc. Bank plays an important role in the economic development of the country. The banking system is considered as the backbone of the economy and it has always played a significant and commendable role towards the growth of the economy of a country. The banks system is in charge of the mobilization of the funds from the areas where the funds are in surplus and distributes them to the deficit sectors to enhance the productivity and makes sure that the efficient utilization of the funds takes place. A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities.
It is also focusing at the top end of the market, on whole sale banking capabilities to provide India’s growing mid / large corporate with a complete array of products and services. It is consolidating its global treasury operations and entering into structured products and derivative instruments. Today, the bank is the largest provider of infrastructure debt and the largest arranger of external commercial borrowings in the country. It is the only Indian bank to feature in the Fortune 500
Availability of adequate finance with an enterprise will not force the enterprise to resort to pressure tactics to collect the mounts due from customers. This would certainly improve the relationship between the enterprise and the customers, and would promote sales. 16. Finance is necessary for the acquisition of fixed assets like land, building, machinery etc. and also for meeting the working capital needs.
the potential collaterals that could be accepted in case of secured funding. The Liquidity coverage ratio currency wise may be checked by the supervisor on a regular basis. Banks must have a source of receiving instant data for liquidity difficulties and also monitor prices of various liquid securities and price of assets in the market. LEVERAGE RATIOS A key feature of the financial crisis, there was excessive leverage in the banking system with regard to on-balance sheet and off-balance sheet exposures. Hence, during the crisis, the banks were forged to reduce the loans towards these exposures as a result of deteriorating value of the asset prices.