Banks Npa & Impact on Indian Economy

The Bank and the Banking sector is since a long time a significant point in the economy and in the private sector. Banking law is very important to regulate the relation between customer and bank. On the one hand it protects the interest of the bank and on the other hand also the rights of the customers that are in an inferior position. In both of them the customer- bank relation plays a very important role.

According to the data above, Harrison is making a slow payment to NCB compared to the other creditors. Decreasing Harrison’s credit limit can protect NCB from not being paid for the goods and at the same time will force Harrison to sell their inventory and prevent from ordering excess inventory. This situation also requires from Harrison’s management a declaration concerning the issue of late payments to NCB.

This necessitated the need for development of regulatory measures for the industry. Bank regulation is a legal structure by which all financial

Retail banking is, however, quite broad in nature - it refers to the dealing of commercial banks with individual customers, both on liabilities and assets sides of the balance sheet. Fixed, current / savings accounts on the liabilities side; and mortgages, loans (e.g., personal, housing, auto, and educational) on the assets side, are the more important of the products offered by banks. Related ancillary services include credit cards, or depository services. Retail banking refers to provision of banking services to individuals and small business where the financial institutions are dealing with large number of low value transactions. This

With this, the loans stay overdue for 270 days or end up being 270 days past due at any time, leading the loans to "default" condition.

Age of receivables: This ratio is very low, 7 days in 2003, which is well below the industry ratio of 19.1 days. Even though the trend is increasing but it is still a positive sign for the company and it shows that probably Lawsons has few credit sales.

Banking can be defined as a process through which the finances of a country is controlled and created. These finances are loaned to gain profit through interest. In recent times banks perform varied functions like ATM cards, safeguarding of valuable things, providing lockers, credit cards and online banking. Banks and banking Katy and in other American cities has helped the world economy. The simple method of safeguarding money and lending it to the borrowers leads to a productive flow of money. This process has helped in the development of economies of varied countries.

The turmoil in the international financial markets of advanced economies, that started around mid-2007, has exacerbated substantially since August 2008. The financial market crisis has led to the collapse of major financial institutions and is now beginning to impact the real economy in the

General Forbearance – 6 months per Request (interest accrues monthly) maximum number of months allowed: up to 36 months/life of the loan. The Borrower has to submit a reason for the forbearance request, example; financial difficulties/change in employment/medical expenses/other

A well functioning financial system is necessary for enhancing the efficiency of intermediation, which is achieved by mobilizing domestic savings, channeling them into productive investment by identifying and funding good business opportunities, reducing information, transaction, and monitoring costs and facilitating the diversification of risk. This results in efficient allocation of resources, contributing to a more rapid accumulation of physical and human capital, and faster technological progress, which in turn lead to higher economic growth. Anxious to

This background note is intended to provide essential understanding about various ancillary services offered by retail banks to their customers such as; A. Extension of Safe Deposit Locker / Safe Custody Article Facility and Access to Safe Deposit Lockers / Return of Safe Custody Articles by banks B. Remittance facilities for Non-Resident Indians / Persons of Indian Origin / Foreign Nationals C. Interest Rates on Rupee Deposits held in Domestic, Ordinary Non-Resident (NRO) and NonResident (External) (NRE) Accounts D. Forex Facilities for Residents (Individuals) E. Electronic Money The required information is largely sourced from the public domain of Reserve Bank of India websitewww.rbi.org.in

Public sector banks figure prominently in the debate not only because they dominate the banking industries, but also since they have much larger NPAs compared with the private sector banks. This raises a concern in the industry and academia because it is generally felt that NPAs reduce the profitability of a banks, weaken its financial health and erode its solvency.

Commercial banks have played a vital role in giving direction to economic development by catering the financial requirement of trade and industry in the country. By encouraging thrift among the people, commercial banks have fastened the process of capital formation. Banks draw the community savings into the organized sector which can then be allotted among the different economic activities according to the priorities laid down by planning authorities in the country. ‘The banks are not only the safe deposit vaults for these savings, but taking the banking system as a whole, they also create deposits in the process of their lending operations. However, the important function of a banker is the

Banks’ ability to promote growth and development depends on the extent to which financial transactions are conducted with trust and less risk. If the foundation on which a bank(s) are built lack institutional, government and above all public confidence, such a bank may collapse. So therefore, it is essential that every single bank must have an internal control system were the internal audit department makes sure that their accounting principles provide an effective means of recording and reporting monetary transactions, providing organisation information and securing the company’s asset from fraud and misappropriation (Achibong, 1993).

ii. the account remains 'out of order' for a period of more than 90 days, inrespect of an overdraft/ cash Credit(OD/CC),