“Management of Non-Performing Assets (NPAs) and Recovery Strategies of Old Private Sector Banks in Tamilnadu”. QUESTIONNAIRE Dear respondents, I am V. Sekar, Director (Finance), Hindustan Insecticides Limited, (formerly Dy. General Manager, Lakshmi Vilas Bank Ltd, Karur, Tamilnadu), pursuing my Doctorate in Alagappa University, Karaikudi under the supervision of Dr.V.BALALCHANDRAN. For the research work, I have selected the topic “Management of Non-Performing Assets and Recovery Strategies of Old Private Sector Banks in Tamilnadu. So, I kindly request you to provide and extend your support for filling the questionnaire. The information will be kept confidential and the same would be used only for academic purpose. This will be purely used for the research purposes only. Thanking you. V. Sekar, Research Scholar, Alagappa Institute of Management, Alagappa University, Karaikudi.
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“Management of Non-Performing Assets (NPAs) and Recovery Strategies
of Old Private Sector Banks in Tamilnadu”.
QUESTIONNAIRE
Dear respondents,
I am V. Sekar, Director (Finance), Hindustan Insecticides Limited, (formerly Dy. General
Manager, Lakshmi Vilas Bank Ltd, Karur, Tamilnadu), pursuing my Doctorate in Alagappa University,
Karaikudi under the supervision of Dr.V.BALALCHANDRAN. For the research work, I have selected the
topic “Management of Non-Performing Assets and Recovery Strategies of Old Private Sector Banks in
Tamilnadu. So, I kindly request you to provide and extend your support for filling the questionnaire.
The information will be kept confidential and the same would be used only for academic purpose. This
will be purely used for the research purposes only.
Thanking you.
V. Sekar,
Research Scholar,
Alagappa Institute of Management,
Alagappa University,
Karaikudi.
PART-A
□ Personal profile:
i. Designation: ________________________________________________________
ii. Name of the Institution: _______________________________________________
iii. Positon: ____________________________________________________________
Top Middle
Management □ Management □ Junior Management □
iv. Experience
1. Less than 10 years
2. 10-20 years
3. 20-30 years
4. Above 30 years
v. Gender: □ Male □ Female
Age (No years) □ below 25 □ 25-35 □ 35-45 □ above 45
Contd……,
Part-B
Questionnaire
I. The following are stated to be the main reasons for NPA. Assign Rank 1 to the most
important reason, Rank 2 to the next important reason and so on.
A. Higher rate of interest �
B. Wilful default �
C. Diversion of funds �
D. Deficiency in the credit appraisal standards �
E. Lack of supervision and follow-up �
F. Lack of legal support �
G. Political interference �
II. The following are some of the general opinion on NPAs. Please indicate your opinion by placing a (√√√√)
mark at appropriate column in the five point response scale.
A B C D E
A. Agree
B. Disagree
C. Strongly agree
D. Strongly Disagree
E. No opinion
1. There is a feeling that banks � � � � �
are not able to bring down the
rate of interest to borrowers,
on account of NPAs.
2. There is no system in the bank � � � � �
to fix the rate of interest to the
borrowers on the basis of repaying
capacity.
3. Overall cost to the borrower � � � � �
in terms of interest rate,
processing charges, legal
charges, supervision and
follow-up charges are very
high and it results in NPAs.
4. The rate of interest charged to � � � � �
the borrowers are much in
excess of the declared
Base Rate/BPLR for most
of the borrowers.
5. Present Capital adequacy � � � � �
norms can reduce/minimize
the risk of NPAs for banks.
6. Banks raise subordinate debts � � � � �
at high cost to supplement the
tier II Capital and Capital
Adequacy.
7. It is generally felt that banks � � � � �
do not pay adequate attention
to borrower customers as they
do in the case of deposit
customers.
8. There is no system of exchange � � � � �
of information among banks
about their experience with
borrowing customers.
9. There is a general feeling that � � � � �
banks do not have an effective
market intelligence system to
know more about the borrowers
and act accordingly.
10. Availability of staff to manage � � � � �
loan portfolio is generally
inadequate.
11. Because of growing NPAs, � � � � �
there is a tendency among
banks to switch over to
investments in Government
securities.
12. Of late, there is a general � � � � �
aversion to lending among
banks because of NPAs.
13. Only banks and other stake � � � � �
holders other than defaulting
borrowers get affected
because of NPAs.
14. Representative bodies like � � � � �
FICCI, Chambers of
Commerce and Industry,
Confederation of Indian
Industry, Federation of India
Exporters Association, etc. do
not support banking industry
in recovering the banks’ dues
from their members.
15. Banks do nothing about NPA and � � � � �
wait for on Economic recovery
to rescue Borrowers.
16. Banks try to postpone the problem � � � � �
such as rescheduling of debt, new
loans to delinquent borrowers, and
spend months and years in discussion
with Borrowers on loan restructuring.
17. Banks Develop multiple disposition � � � � �
strategies and take fast, decisive
action to move NPA’s off their
Balance Sheets.
18. Banks work out and restructuring, � � � � �
discounted pay-offs on negotiated
settlement, bulk sales.
19. Bank do securitization, auctions, � � � � �
transferring NPA’s domestic ARC’s.
20. Political leadership is lacking to effect � � � � �
reforms on a country’s economy,
legal structure and banking system.
21. Regulatory leadership is lacking to � � � � �
effect Management of financial and
banking sector reforms, action to
strengthen loan review and Capital
market developments and
Development of Secondary markets.
22. Government should enable Banks � � � � �
to raise more capital from
more sources.
23. Bank should reduce capital cost and � � � � �
increase financial system liquidity
and stability.
24. Main contributory factors for NPA in pre-liberalization era:
a) Down sizing in Agricultural Sector � � � � �
advance
b) Industrial licensing. � � � � �
c) Sector-wise reservation. � � � � �
d) Controlled interest Rate. � � � � �
e) Tariff protection. � � � � �
f) Role of Development Financial Institutions� � � � �
25. NPA stated to be declined due to the following reasons.
a) De-licensing of industries. � � � � �
b) Commencement of Reforms in the � � � � �
Economy in 1991.
c) Issuance of RBI guidelines on Income � � � � �
Recognition and Assets classification
(IRAC) in April 1992.
d) Banking Sector generally adopted a � � � � �
provide and hold strategy.
e) Setting up of Corporate Debt Restructuring� � � � �
• Name of Bank: ______________________________________________________
PART-B
II The following are stated to be main reasons for industries becoming sick & loss making and subsequently become NPA from the Borrowers point of view. Please indicate your
opinion by placing a (√√√√) mark at appropriate column in the five point response scale.
A B C D E
F. Agree G. Disagree H. Strongly agree I. Strongly Disagree J. No opinion
H. Higher rate of interest & other cost � � � � �
I. Inadequate loan facilities � � � � �
J. Excess loan facilities � � � � �
K. Obsolete technology � � � � �
L. Lack of modernization & upgradation � � � � �
M. Lack of market for the product � � � � �
N. Defective product � � � � �
O. No timely support from the Bank � � � � �
P. Siphoning of funds � � � � �
Q. Monsoon failure � � � � �
R. Recession in economy � � � � �
S. Limited reach of Banks � � � � �
T. Rigid approach of Bank � � � � �
U. Lack of supporting business development � � � � � services
III. The following are some of the general opinion on NPAs. Please indicate your opinion by
placing a (√√√√) mark at appropriate column in the five point response scale.
A B C D E
A. Agree B. Disagree C. Strongly agree D. Strongly Disagree E. No opinion
1. There is a general feeling that � � � � � banks do not have an effective market intelligence system to know more about the borrowers and act accordingly.
2. It is generally felt that banks � � � � � do not pay adequate attention to borrower customers as they do in the case of deposit customers.
3. The rate of interest charged to � � � � � the borrowers are much in excess of the declared Base Rate/BPLR for most of the borrowers.
4. There is no system in the bank � � � � � to fix the rate of interest to the borrowers on the basis of repaying capacity.
5. There is a feeling that banks � � � � � are not able to bring down the rate of interest to borrowers, on account of NPAs.
6. Bank try to postpone the problem � � � � � such as rescheduling of debt, new
loans to delinquent borrowers, and
spend months and years in discussion
with Borrowers on loan restructuring
7. Of late, there is a general � � � � � aversion to lending among banks because of NPAs.
8. Banks do nothing about NPA and � � � � � wait for on Economic recovery to rescue Borrowers.
9. Political leadership is lacking to effect � � � � � reforms on a country’s economy, legal structure and banking system.
IV. The following are some of the challenges faced by Borrowers due to which the Borrowal
account becomes NPA. Assign Rank 1 to the most important reason, Rank 2 to the next important reason and so on.
1. Major break down in plant & machinery � � � � �
2. Labour strike � � � � �
3. Frequent changes in Management � � � � �
4. Sudden death/illness of partner/director � � � � �
5. Disputes among partners/directors � � � � �
6. Repeated reconstitution of the firm/Board � � � � �
7. Non enhancement of credit limits by banks � � � � � in time
8. Recession in industry � � � � �
9. Exchange fluctuation � � � � �
10. Devaluation of Rupee � � � � �
Borrowers feel that NPA arises due to the following reasons. Please indicate your opinion by
placing a (√√√√) mark in appropriate column.
A B C D E
A. Agree B. Disagree C. Strongly agree D. Strongly Disagree E. No opinion
1. Poor quality of advance � � � � �
2. Political interference in the lending process � � � � �
3. Neglect of proper Credit Appraisal � � � � �
4. Need based credit facilities � � � � �
5. Non follow up � � � � �
6. End use supervision of funds � � � � �
7. Direct lending � � � � �
8. Loan mela � � � � �
9. Credit to various segments under political � � � � � Influence.
10. Expectancy of waiver of small loans of � � � � � Agriculture loan.