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  • 7/27/2019 Report on NPA






    Submitted to

    The Director

    Bharati Vidyapeeth Deemed University

    IMED, Pune

    For the Award

    Master of Business Administration (MBA)


    Pooja Dwivedi

    Under the Guidance of

    Prof.Dr.Kriti Gupta


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    Certi fi cate fr om the company/organi zation

    (Oncompany letter head)

    This is to that (pooja dwivedi)daughterof( Mr R.R dwivedi)pursuing MBA from I nstitute of

    management and entr epreneur ship development,punehas successfully completed the

    project reportin our organization on the titled,Retail lending &NPA Managementfrom 10

    june to6th Augest2013.During

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    Certificate of Originality

    This is to certify that the project report entitled Retail lending & NPA Managent Submitted

    to Bharati Vidyapeeth Deemed University, Pune in partial fulfilment of the requirement for

    the award of the degree of MBA is an original work carried out by Ms Pooja dwivedi under

    the guidance of Ms. Kirti Gupta.The matter embodied in this project is a genuine work done

    by Pooja Dwivedi to the best of my knowledge and belief and has not been submitted

    before,neither to this University nor to any other University for the fulfilment of requirement

    of any course of study.

    Sinature of the Student Signature of the Guide


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    This is to certify that the project titled Finance of Retail lending & NPA Management is an

    academic work done by pooja dwivedi submitted in the partial fulfilment of the

    requirement for the award of the degree of Master of Business Administration from Bharati

    Vidyapeeth Deemed University; Pune. It has been completed under the guidance of Ms.kirti

    Gupta and Mr. Ms Patel We are thankful to Union bank of india.for having allowed our

    student to undergo project work training. The authenticity of the the project work will be

    examined by the viva examiner which includes data verification,checking duplicity of

    information etc.and it may be rejected due to non fulfilment of quality standards set by the


    Dr. Sachin S.Vernekar

    (Director IMED)

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    I would like to express my gratitude to MR. MS PATEL, Branch manager,Union Bank of

    India, pune krve road and MR. vyankat patil manager), Union Bank of India, krve roadbranch, pune, for giving me the permission to carry out my summer internship at UnionBank of India, pune. Their support and encouragement has been a source of inspiration forme and made my journey in Bank of India a delight.

    I would like to thank MR . (Senior manager) and Mr. vyankat patil, Manager (Credit) ofAdvances Department,Union Bank of India, Pune i who as my Project guide alwaysencouraged me to do new things, critically analyze the cases and gave his inputs as and whenit was necessary.

    My gratitude also goes to Professor krirti gupta, Institute of Management and

    Entrepreneurship Development, Pune, who as my faculty guide help me in my project andguide me . I thank him for guiding me at every step of the project.

    I was almost convinced that I was aware of the business & market forces that drive theBanking industry. However, once I started out working on the same, I realized how grosslyinadequate my knowledge had been.

    Name & Signature of student

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    This project report attempts to bring under one cover the entire hard work and dedication put

    in by me in the completion of the project work on A Study on Retail Banking & NPA


    I have expressed my experiences in my own simple way. I hope who goes through it will find

    it interesting and worth reading. All constructive feedback is cordially invited.

    The research project has thoroughly revised & made up to date. The contents have been

    strengthened up date & modified to improve clearly & arouse enthusiastic interest in the

    subject of finance. Figures, charts, diagrams, models, tables etc. liberally used to easily

    understand the complex things.

    The extract of the work is presented in this report under various heading that includesIndustry profile, research objective, research design, data collection method, Sampling

    design, analysis and interpretation, results, conclusion and suggestions

    Thank you

    Name & Signature of student

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    Name & Signature of the student

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    Company profile


    Union Bank of India (UBI) was registered on 11 November 1919 as a limited company

    inMumbaiand was inaugurated byMahatma Gandhi. At the time of India's Independence in1947, UBI still only had four branches - three in Mumbai and one inSaurashtra, all

    concentrated in key trade centres. After Independence UBI accelerated its growth and by the

    time the government nationalized it in 1969, it had grown to 240 branches in 28 states.

    Shortly after nationalization, UBI merged in Belgaum Bank, a private sector bank established

    in 1930 that had itself merged in a bank in 1964, the Shri Jadeya Shankarling Bank. Then in

    1985 UBI merged in Miraj State Bank, which had been established in 1929. In 1999

    theReserve Bank of Indiarequested that UBI acquire Sikkim Bank in a rescue after extensive

    irregularities had been discovered at the non-scheduled bank. Sikkim Bank had eight

    branches located in the North-east, which was attractive to UBI.

    UBI began its international expansion in 2007 with the opening of representative offices inAbu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China. The next year,

    UBI established a branch in Hong Kong, its first branch outside India. In 2009, UBI opened a

    representative office in Sydney, Australia.

    At present, the offshore banking operations of Union Bank of India are lead by its branches in

    Hong kong and newly opened branch in Dubai at Dubai International Financial Centre.
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    Definition of 'Nonperforming Asset'

    A debt obligation where the borrower has not paid any previously agreed uponinterest and principal repayments to the designated lender for an extended period oftime. The nonperforming asset is therefore not yielding any income to the lender inthe form of principal and interest payments.

    explains 'Nonperforming Asset'

    For example, a mortgage in default would be considered non-performing. After aprolonged period of non-payment, the lender will force the borrower to liquidate anyassets that were pledged as part of the debt agreement. If no assets were pledged, the

    lenders might write-off the asset as a bad debt and then sell it at a discount to acollections


    NPA is a classification used by financial institutions that refer to loans that are in jeopardy of

    default. Once the borrower has failed to make interest or principal payments for 90 days the

    loan is considered to be a non-performing asset. Non-performing assets are problematic for

    financial institutions since they depend on interest payments for income

    . Banks are required to classify non-performing assets further into the following threecategories based on the period for which the asset has remained non-performing and therealisability of the dues:

    1. Sub-standard assets: a sub standard asset is one which has been classified as NPA fora period not exceeding 12 months.

    2. Doubtful Assets: a doubtful asset is one which has remained NPA for a periodexceeding 12 months.

    3. Loss assets: where loss has been identified by the bank, internal or external auditor orcentral bank inspectors but the amount has not been written off, wholly or partly.

    Sub-standard asset is the asset in which bank have to maintain 15% of its reserves. All thoseassets which are considered as non-performing for period of more than 12 months are calledas Doubtful Assets. All those assets which cannot be recovered are called as Loss Assets.


    NPA in simple words may be defined as the borrower does not pay principal and interest for

    a period of 180 days.

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    The core banking business is of mobilizing the deposits and utilizing it for lending to

    industry. Lending business is generally encouraged because it has the effect of funds being

    transferred from the system to productive purposes which results into economic gr