NPAs Management in Regional Rural Banks (RRBs) in Tamil Nadu, India

Abstract

In this paper, study is made about the Regional Rural Banks (RRBs) and their management of NPA in India. Due to lending process and weakcred it appraisal system, the RRBs have accumul ated Non- Performing Asset (NPAs ). NPAs ad versely affect the capital adequacy ratio that reveals the financial health conditi on of a bank. The study examines and point out the performance of loan portfolios, the amount of NPAs, problem faced due to existence of NPAs and decision making process of NPA Management in the RRBs. This paper studies simples among 86 regional Rural Banks in Tamilnadu, India. The resultsare derived from the use of statistical tools like Percentage analysis, ANOVA Test and Karl Pearsen's Coefficient of correlation and accordingly suitable suggestions have been made for effective management and controlling of NPAs Overall, we found that the ratio of gross NPAs to total assets and ratio to gross NPAs to total advances in RRBs has constantly decline over the period of time.