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An Effectiveness Assessment of Preventive Management Strategies in order to Manage Non Performing Assets in Indian banks: A Case Study

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Listed:
  • Bharat Kumar Meher
  • G. L. Puntambekar
  • Iqbal Thonse Hawaldar
  • Cristi Spulbar
  • Ramona Birau
  • Cristian Rebegea

Abstract

There are two kinds of strategies to control Non Performing Assets i.e. curative and preventive. The paper is an attempt to focus on the effectiveness of various preventive strategies in controlling NPA in future.For this study primary data have been collected from 82 branches out of 138 branches of Sagar District in Madhya Pradesh of India. The respondents are the branch managers or recovery officer of each branch.The primary data are related to the causes of NPA, actual usage of preventive measures and effectiveness of each preventive strategy. It highlights few new causes which are barely covered by the earlier researches. The study also represents the actual usage of various preventive measures along with the effectiveness of preventive measures in averting NPA to be occurred in future. The outcome of this study could provide a valuable insight about which strategy is more effective to prevent these stressed assets. Besides that, it could aware the banking authorities regarding the problems faced by the managers in using the preventive measures. JEL Codes - G21; G23, G24

Suggested Citation

  • Bharat Kumar Meher & G. L. Puntambekar & Iqbal Thonse Hawaldar & Cristi Spulbar & Ramona Birau & Cristian Rebegea, 2020. "An Effectiveness Assessment of Preventive Management Strategies in order to Manage Non Performing Assets in Indian banks: A Case Study," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 67(2), pages 235-258, June.
    • Handle: RePEc:aic:saebjn:v:67:y:2020:i:2:p:235-258:n:13
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    References listed on IDEAS

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    1. Laxmi Koju & Ram Koju & Shouyang Wang, 2018. "Macroeconomic and Bank-Specific Determinants of Non-Performing Loans: Evidence from Nepalese Banking System," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 7(3), pages 111-138.
    2. R. Bhaskaran & Lalit Bhalla & Vishal Sarin & Sukhpreet Kaur & Afzalur Rahman & Gagandeep Singh & Amit M. Bhattacharya & Abhishek Kumar Jha & Pooja Verma, 2016. "Non-performing assets of public and private sector banks in India - a comparative study," International Journal of Services and Operations Management, Inderscience Enterprises Ltd, vol. 25(2), pages 155-172.
    3. repec:eme:mfppss:mf-06-2018-0259 is not listed on IDEAS
    4. B.Selvarajan & G.Vadivalagan, 2013. "A Study on Management of Non Performing Assets in Priority Sector reference to Indian Bank and Public Sector Banks (PSBs)," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 2(1), pages 31-42, January.
    5. Samaresh Bardhan & Vivekananda Mukherjee, 2016. "Bank-specific determinants of nonperforming assets of Indian banks," International Economics and Economic Policy, Springer, vol. 13(3), pages 483-498, July.
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    Cited by:

    1. Robert Dorin Filip & Ninulescu Petre Valeriu, 2023. "Investigating The Impact Of Economic Sustainability On Banking System Development," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 2, pages 147-150, April.

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    More about this item

    Keywords

    Non-Performing Assets (NPA); Preventive Management Strategies; Non-Parametric Tests; Early Warning Signals (EWS); Demonstration Effect on NPA;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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