FACTORS TRIGGERING NON-PERFORMING ASSETS IN APPRAISAL STAGE OF LOANS IN INDIAN COMMERCIAL BANKS- AN EMPIRICAL STUDY

Non-Performing Asset (NPAs) is generated in three stages of loan proposal i.e., appraisal stage, sanction and disbursal stage and post disbursal stage. The first stage is the appraisal stage of a loan where precondition of a loan proposal is analysed. The study aims to find out the causes of NPAs at appraisal stage through primary survey among the credit officers of the bank. Factor analysis is performed to point out the important factors that are responsible for generation of NPAs due to faulty appraisal of a loan. Three major factors i.e. lack of knowledge about exposure, organization
failure, and turnaround time (TAT) were obtained through analysis for which major exposure become NPAs. Finally ANOVA, Post-Hoc test between the groups is performed based on the demographic parameters i.e. type of organization they are working, Name of the department the concerned officer is working, and scale of the officers.