Page 37 - BANKING FINANCE JANUARY 2016 ONLINE

COVER STORY

MAGNITUDE AND
CAUSES OF NON-
PERFORMING

ASSETS

1. Introduction 2. Methodology

One of the most disquieting features of the agricultural There are 79 Andhra Pragathi Grameena Bank branches
credit structure in India is the incidence of ever increasing functioning in SPSR Nellore District. These branches are
Non Performing Assets (NPAs). The high level of NPAs divided into two groups, those serving the farmers in the
restricts the capacity of lending institutions to recycle canal region and those serving in the non-canal region.
funds, besides threatening the prospects of continued flow There are 40 branches in the canal region and 39 branches
of external credit for agricultural development. in the non-canal region. A random sampling of 8 per cent
of the total branches i.e., 6 branches in all were taken,
A wide range of causes influence the level and the trends representing 3 APGB branches from each region.
in NPAs of the agricultural credit institutions. In this paper
an attempt has been made to study the concept of NPAs Further, the list of farmers who borrowed loans from 6
and magnitude and causes of NPAs among different APCB branches were collected during 2013-14 and 2014-
categories of farmers in SPSR Nellore District. 15. Later, 210 farmers (35 from each branch) who
borrowed loans from the bank are selected randomly with
About the author probability propotional sampling method (PPS sampling
method) from the 6 sample APGB branches. The ultimate
A. Chiranjeevi sample in both the regions works out to 210.

Ph. D. Research Scholar, Dept. of Commerce, 3. Definition of NPAs
S. V. University, Tirupati
According to RBI an asset, including a leased asset, becomes
Prof. B. Ramachandra Reddy non-performing when it ceases to generate income for the
bank. Non-performing asset means an asset or account of
Proessor, Dept. of Commerce
S. V. University, Tirupati.

BANKING FINANCE | JANUARY | 2016 | 37

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