Performance of IDBI Bank with Reference to Non Performing Assets

Abstract

Over the few years Indian Banking, attempts to integrate with the global banking has been facing lots of hurdles in its way due to certain inherent weakness, despite its high sounding claims and lofty achievements. In a developing country, banking is seen as an important instrument of development, while with the demanding Non Performing Assets (NPAs), banks have become burden on the economy. Non Performing Assets are not merely non remunerative, but they add cost to the credit Management. Non Performing Assets have affected the profitability, liquidity and competitive functioning of banks and developmental of financial institutions and finally the psychology of the bankers in respect of their disposition towards credit delivery and credit expansion. NPAs do not generate any income for the banks, but at the same time banks are required to make provisions for such NPAs from their current profits. Lower level of Non Performing assets helps the bank in consolidating their positions and gives credence to efficiency of the management. It is necessary for the bank to adopt proper credit monitoring mechanism, with periodical inspection of the units along with regular flow of information from them pertaining to their financial liquidity, annual accounts, stock reports, etc., besides comparative risk analysis and compliance of terms and conditions of sanction. Bank is expected to make sincere efforts to recover the amount from assets which have already slipped into NPAs category.