Pattern and determinants of non-performing assets (NPA) of Salem district Central Cooperative Bank (SDCCB): A micro level analysis Sabariraj C, Singh Virendra* Department of Agricultural Economics, G B Pant University of Agriculture & Technology, Pantnagar - 263145, Uttarakhand *Corresponding author: vsingh_pachara@yahoo.com
Online published on 28 September, 2023. Abstract The study hypothesizes that the cooperatives in the present time of competition are losing ground on one hand and their philosophy is limiting them to perform efficiently on the other hand, hence cannot avoid non-performing assets. The study is aimed at understanding the pattern and determinants of NPAs incurred by SDCCB. Descriptive analysis along with step-wise regression analysis was done using time series data procured from the bank. Findings reveal that the most of bank’s resources (66.96 per cent) were engaged in lending for non-agricultural purposes and non-agricultural loans of the bank were responsible for the highest amount of NPAs incurred (Rs.3751.72 lakh, 40.23 per cent) followed by cash credit and overdrafts (Rs. 2423.13 lakh, 25.99 per cent) and agricultural loans (Rs.2115.68 lakh, 22.69 per cent) over an average of five years. Temporal pattern reveals that the NPAs of the bank decreased by 24.86 per cent from Rs.10358.24 lakh in 2014 to Rs.7783.17 lakh in 2018. The variable ‘follow up’ was found to impact the NPAs of the bank negatively and significantly, whereas the variable ‘loan waivers’ was found to impact the same positively and significantly. In order to ensure the long-term viability of the co-operative credit structure, the bank should focus their attention on follow up activities after disbursement of loans. Besides proper scrutiny of loan application, examination of collateral, etc. Aspects like loan waivers or loan structuring need to be looked into in totality. Top Keywords Agricultural loans, Cash Credit & Overdrafts, Determinants of NPAs, Liquidated Societies, Non-Agricultural Loans. Top |