Impact Of Non Performing Assets On Banking Industry Essay

Assets that are excluded during the Medicaid qualification process are referred to as non-countable assets. Owning these assets will not affect Medicaid eligibility. Primary non-countable assets include a primary home, many household goods and personal effects, a single vehicle, and funeral/burial funds and spaces.

Technological advancement has had a gigantic effect in the banking industry. Over the past few decades, the financial services industry has changed considerably with banking transforming from the pen and paper method to the computers and internet method. The pen and paper method took weeks or even months for the transaction to be eventually completed, and then the dramatic introduction of the computer and internet method which changed that time frame to only a matter of seconds to be completed, which reduced the amount of time and labor needed to complete a transaction significantly. Banking is considered one of the most important economic sectors with it being severely influential and responsive to any little change, whether it is domestic or international. Some extreme changes that were brought about by the development of this new technology turned into a globalized nature for the financial services industry. One stroke of a key on a computer could and would change a person 's life extensively or even have a global impact. The new technologies that were created and introduced changed how the consumers managed their money from that time on. Technology has helped to protect peoples’ hard earned money and make it much more impossible for people to be able to write out bad checks or even holding up a bank. The advancement in technology however, also came with some security risks as most things do, that could affect the money that people trusted with the bank and

Banks are the most significant players in the Indian financial market. They are the biggest purveyors of credit, and they also attract most of the savings from the population. Dominated by public sector, the banking industry has so far acted as an efficient partner in the growth and the development of the country. Driven by the socialist ideologies and the welfare state concept, public sector banks have long been the supporters of agriculture and other priority sectors. They act as crucial channels of the government in its efforts to ensure equitable economic development.

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From 2011-2014, the total non-current assets have decreased from 79% to 78% of total assets, whereas the total current assets have increased from 21% to 22%. It is to be noted, that since the total assets are the sum of non –current and current assets, the changes are compensating each other and keeping it at

The main objective of this study is to evaluate liquidity and profitability position of the firm for 5 years, to analyze the financial condition of State Bank of India by applying selective trend values, to predict the financial health and viability of the component of cash and fund flow statement and to evaluate the working capital position and its requirement in near future.

Based on their objectives one bank should decide as quickly not to get affected by non-performing asset

Athanasoglou, P. P., Brissimis, S. N., & Delis, M. D. (2005). Bank-specific, industry-specific and macroeconomic determinants of bank profitability (32026). Retrieved from Munich Personal RePEc Archive website: http://mpra.ub.uni-muenchen.de/32026/1/MPRA_paper_32026.pdf

There are over 46 companies that exist within the banking industry. Citigroup, Wells Fargo, Bank of America, J.P Morgan Chase and several others. The competitors are relatively equal in size, however, they have different ranging revenues. The four major competitors consist of Citigroup, Bank of America, J.P Morgan Chase, and Wells Fargo. Revenues for Citigroup Inc. were reported at $76 billion in 2014, Bank of America was reported at $100 billion, and $96 billion for J.P Morgan Chase. Wells Fargo lags behind with $26 billion in revenues. Each banking company had roughly around 200,000 employees. Another competitor includes the Commercial Bank of China with revenues totaling $2.8 billion. Each bank has an average of $2 billion in assets, so not one bank has more than the other.

The financial institutions have obligations to fulfill depositors’ requirement of withdrawing deposits. In addition, they need sufficient funds to invest projects and issue loans to make profit, which maintains a normal operation. Trade off exists between liquidity risk and profit. The ideal position is to earn high profit while minimum risks. As a result, liquidity management is important for the financial institutions to avoid risks of default.

ASSET QUALITY OF THE BANKS: As per the RBI the banking system in India is self-sufficient & is well funded. The asset quality of the banks is however a concern. Assets of the bank are largely loans such as mortgages, government bonds & cash. A healthy level of asset quality is imperative for survival of the bank. In India’s per the RBI's latest report released on June 17 the banking stability indicator (BSI) that indicates banks financial stability worsened between the quarter of September 2016 to March 2017 due to a deterioration in asset quality and profitability. The report clearly stated that the gross non-performing assets (GNPAs) of some scheduled commercial banks (SCBs) may rise from the existing 9.6 per cent in the month of March

It is vital for the banks management to differentiate between performers and non- performers and be able to eliminate skilfully the latter. Non-performers in an organization often the banking industry is keen on providing the best service to its revered customers. Those not willing to toe the line and follow the policies and procedures should be cut-offs failure to which they will cost the organizations much more. It is also important to manage the employees who are productive and those who have ceased due to various reasons such as old age or terminal illnesses. These equally important members can be put in the department that their full latent is actualized and for those old ones when their time to exit come they

The quality of Indian banks’ assets is likely to deteriorate over the next two years. This will be driven by the slowdown in the economy, and by the aging of loans made in recent years. The NPAs are considered as an important parameter to judge the performance and financial health of banks. The level of NPAs is one of the drivers of financial stability and growth of the banking sector. The Financial companies and institutions are nowadays facing a major problem of managing the Non Performing Assets (NPAs) as these assets are proving to become a major setback for the growth of the economy. NPAs in simple words may be defined as the borrower does not pay principal and

After the 2007-08 economic down-turns, RBI had issued a warning to banks in regards to mounting Non Performing

The efficiency of a bank is not reflected only by the size of its balance sheet but also the level of return on its assets. The NPAs do not generate interest income for banks but at the same time banks are required to provide provisions for NPAs from their current profits .The NPAs have