Non-Performing Assets (NPA):

NPAs are loans or advances that have ceased to generate income for a bank due to non-payment or
irregular payment.

Types of NPAs:
1. Substandard Assets: Overdue for 12-24 months

2. Doubtful Assets: Overdue for 24-36 months

3. Loss Assets: Overdue for 36+ months, with little chance of recovery

Causes of NPAs:
1. Economic downturn

2. Poor credit appraisal

3. Inadequate collateral

4. Fraud

5. Wilful default

6. Regulatory issues

Effects of NPAs:
1. Reduced profitability

2. Increased provisioning

3. Decreased lending capacity

4. Higher risk weighted assets

5. Negative impact on credit rating

Identification of NPAs:
1. 90-day overdue criterion

2. Interest payment overdue

3. Principal repayment overdu

Provisioning Requirements:
1. Substandard Assets: 15-20%

2. Doubtful Assets: 25-50%

3. Loss Assets: 100%

NPA Resolution Methods:

1. Recovery through legal proceedings

2. One-time settlement

3. Debt restructuring

4. Asset reconstruction

5. Write-off

Recent Initiatives:
1. NPA resolution through National Company Law Tribunal (NCLT)

2. Bankruptcy law reforms

3. Asset quality review

4. Prompt corrective action (PCA) framework

Banks' NPA Levels (India):

1. Public Sector Banks (PSBs): 12.5% (2022)

2. Private Sector Banks: 4.5% (2022)

Non-Performing Assets (NPAs) can be categorized based on various criteria:

Based on Risk Level:

1. Sub-Standard Assets: Less than 12 months overdue

2. Doubtful Assets: 12-36 months overdue

3. Loss Assets: Over 36 months overdue or uncollectible

Based on Recovery Prospects:

1. Recoverable NPAs: Likely to recover partial or full amount

2. Partially Recoverable NPAs: Uncertain recovery

3. Non-Recoverable NPAs: Little to no chance of recovery

Based on Account Type:

1. Loan NPAs: Overdue loans

2. Advance NPAs: Overdue advances

3. Credit Card NPAs: Overdue credit card debt

4. Overdraft NPAs: Overdue overdraft facilities

5. Term Loan NPAs: Overdue term loans

Debt Recovery Tribunal (DRT):

The DRT is a specialized tribunal in India, established to facilitate speedy recovery of debts due to banks
and financial institutions.

Key Features:

1. Established under Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (RDDBFI)

2. Presided over by a Presiding Officer, appointed by the Central Government

3. Jurisdiction: Original and appellate

Types of Cases:
1. Recovery of debts above ₹10 lakhs

2. Cases involving secured and unsecured loans

3. Suits for recovery of debts, interest, and costs

Procedure:
1. Filing of application by creditor

2. Service of notice to defendant

3. Hearing and judgment

4. Appeal to Debt Recovery Appellate Tribunal (DRAT)

Benefits:
1. Speedy disposal of cases (120-180 days)

2. Reduced litigation costs

3. Expertise in debt recovery

Debt Recovery Appellate Tribunal (DRAT):

1. Established to hear appeals against DRT orders

2. Comprises Chairman and Judicial Members

Asset Reconstruction Company (ARC):

Overview
An ARC is a financial institution that purchases and restructures non-performing assets (NPAs) from
banks and financial institutions.

Objectives
1. Acquire NPAs at a discounted price

2. Restructure and recover debts

3. Improve asset quality for banks

4. Enhance liquidity in the market

Functions
1. Asset acquisition

2. Debt restructuring

3. Recovery management

4. Asset management

5. Sale of assets

Benefits
1. Reduces NPAs for banks

2. Frees up capital for banks

3. Enhances credit flow

4. Promotes financial stability

5. Supports economic growth

Types of ARCs
1. Public Sector ARCs (e.g., State Bank of India's SBI ARC)

2. Private Sector ARCs (e.g., Edelweiss ARC)

3. Foreign ARC (e.g., International Asset Reconstruction Company)

About SARFAESI
The SARFAESI Act enables banks and financial institutions to recover non-performing assets (NPAs)
without court intervention.

Objectives
1. Expedite recovery of NPAs

2. Reduce litigation

3. Enhance creditor confidence

4. Improve asset quality

Key Provisions
1. Securitisation: Conversion of debt into marketable securities

2. Reconstruction: Restructuring of debt

3. Enforcement of Security Interest: Possession and sale of secured assets

4. Asset Classification: NPAs categorized as Sub-Standard, Doubtful, and Loss

Eligibility
1. Banks

2. Financial Institutions (FIs)

3. Asset Reconstruction Companies (ARCs)

4. Securitization Companies

Process
1. Notice to borrower (60-day notice)

2. Possession of secured assets

3. Sale of secured assets

4. Recovery of debt

Benefits
1. Faster recovery

2. Reduced litigation costs

3. Improved creditor confidence

4. Enhanced asset quality

Lok Adalat in Banking:

Lok Adalat, meaning "People's Court," is an alternative dispute resolution mechanism in India, resolving
banking disputes through conciliation and mediation.

Objectives:
1. Reduce pending cases

2. Expedite dispute resolution

3. Minimize litigation costs

4. Promote amicable settlements

Banking Disputes Resolved:

1. Loan recovery

2. Credit card disputes

3. Cheque bounce cases

4. ATM/Debit card disputes

5. Banking services issues

Process:
1. Application filing

2. Pre-Lok Adalat counseling

3. Lok Adalat hearing

4. Settlement agreement

5. Award passing
Benefits:
1. Fast-track resolution

2. Cost-effective

3. Reduced litigation stress

4. Preserves customer relationship

5. Compliance with RBI guidelines

Prompt Corrective Action (PCA) Framework:

The PCA framework is a regulatory mechanism implemented by the Reserve Bank of India (RBI) to
monitor and address bank's financial health.

Objectives:
1. Identify weak banks

2. Prevent further deterioration

3. Ensure timely corrective action

4. Maintain financial stability

Triggers:
1. Capital Adequacy Ratio (CAR) below 10.25%

2. Net Non-Performing Assets (NNPA) above 10%

3. Return on Assets (RoA) below -0.5%

PCA Thresholds:
1. Risk Threshold 1 (Breach of CAR/NNPA/RoA triggers)

2. Risk Threshold 2 (Severe deterioration)

3. Risk Threshold 3 (Critical condition)

PCA Measures:
1. Restriction on lending

2. Reduction in expansion plans

3. Increase in provisioning

4. Reduction in dividend distribution

5. Restriction on branch expansion

6. Mandatory capital infusion

Benefits:

1. Early detection of stress

2. Prevents further deterioration

3. Ensures financial stability

4. Promotes transparency

Deposit Insurance and Credit Guarantee Corporation (DICGC):

DICGC is a subsidiary of the Reserve Bank of India (RBI), providing deposit insurance to protect
depositors' interests.

Objectives:
1. Provide deposit insurance coverage

2. Enhance public confidence in banking system

3. Maintain financial stability

Key Features:
1. Deposit insurance coverage up to ₹5 lakhs per depositor per bank
2. Premium paid by banks, not depositors

3. Covers deposits in commercial banks, cooperative banks, and regional rural banks

4. Excludes deposits in primary cooperative societies, rural cooperative banks, and non-banking financial
companies

Benefits:
1. Protects depositors' interests

2. Enhances confidence in banking system

3. Maintains financial stability

4. Supports economic growth

Coverage:
1. Savings deposits

2. Fixed deposits

3. Current deposits

4. Recurring deposits

5. Core banking deposits

Exclusions:
1. Deposits of central/state governments

2. Inter-bank deposits

3. Deposits of financial institutions

4. Deposits of directors/employees exceeding ₹5 lakhs

Claim Process:
1. Bank failure or liquidation

2. DICGC notification

3. Depositor claim submission

4. Verification and payment

Banking Ombudsman:

The Banking Ombudsman Scheme is an independent, impartial, and expeditious mechanism for
resolving customer complaints against banks.

Objectives:
1. Provide fair and timely resolution

2. Enhance customer satisfaction

3. Strengthen banking relationships

4. Reduce complaints and litigation

Jurisdiction:
1. Commercial banks

2. Regional Rural Banks (RRBs)

3. Scheduled Primary Urban Co-operative Banks

4. Non-Banking Financial Companies (NBFCs)

Complaints Covered:

1. Deposit accounts

2. Credit facilities

3. Debit/Credit cards

4. ATM services

5. Internet banking

6. Mobile banking

7. Customer service
Exclusions:
1. Matters pending in court

2. Matters under investigation

3. Complaints against bank employees

Process:

1. Customer submits complaint to bank

2. Bank responds within 30 days

3. Unsatisfied customer approaches Banking Ombudsman

4. Ombudsman investigates and passes award

Banking Ombudsman Awards:

1. Compensation up to ₹20 lakhs

2. Interest on deposits

3. Waiver of charges

4. Correction of account entries

Benefits:
1. Free and convenient

2. Fast-track resolution

3. Impartial and independent

4. No legal fees

Integrated Ombudsman Scheme (IOS):

The Integrated Ombudsman Scheme is a comprehensive grievance redressal mechanism for banking,
insurance, and pension services, launched by the Reserve Bank of India (RBI) and the Insurance
Regulatory and Development Authority of India (IRDAI).
Objectives:
1. Simplify grievance redressal

2. Enhance customer satisfaction

3. Reduce complaints

4. Improve regulatory oversight

Key Features:
1. Single window for grievances

2. Covers banking, insurance, and pension services

3. Online and offline complaint filing

4. Time-bound resolution (within 30 days)

5. Appeal mechanism to RBI/IRDAI

Jurisdiction:
1. Banking Ombudsman (BO)

2. Insurance Ombudsman (IO)

3. Pension Fund Regulatory and Development Authority (PFRDA) Ombudsman

Eligible Complaints:
1. Deposit-related issues

2. Loan-related issues

3. Credit card disputes

4. Insurance policy disputes

5. Pension-related issues

Resolution Process:
1. Complaint filing

2. Acknowledgement and investigation

3. Resolution or recommendation

4. Appeal to RBI/IRDAI (if necessary)

Benefits:
1. Convenient and accessible

2. Faster resolution

3. Improved customer satisfaction

4. Enhanced regulatory oversight

Basel Norms:

The Basel Norms, established by the Basel Committee on Banking Supervision (BCBS), are globally
accepted standards for banking regulation, supervision, and risk management.

Objectives:
1. Strengthen banking stability

2. Enhance risk management

3. Promote international consistency

4. Protect depositors and financial stability

Basel Accords:
1. Basel I (1988): Focus on credit risk

2. Basel II (2004): Expanded to market and operational risk

3. Basel III (2010): Enhanced capital requirements and liquidity standards

4. Basel IV (2017): Revised market risk and capital requirements

Key Components:

1. Capital Adequacy Ratio (CAR)

2. Risk-Weighted Assets (RWAs)

3. Tier 1 and Tier 2 capital

4. Liquidity Coverage Ratio (LCR)

5. Net Stable Funding Ratio (NSFR)

6. Leverage Ratio

Basel III Norms:

1. Minimum CAR: 10.5%

2. Tier 1 capital: 6%

3. Common Equity Tier 1 (CET1): 4.5%

4. LCR: 100%

5. NSFR: 100%

Implementation:
1. Phased implementation (2013-2019)

2. National regulators ensure compliance

3. Regular monitoring and review

Benefits:
1. Enhanced banking stability

2. Improved risk management

3. Increased transparency

4. Better regulatory consistency

Basel III Accord:
The Basel III Accord is a global regulatory framework for banks, developed by the Basel Committee on
Banking Supervision (BCBS). It aims to strengthen bank capital requirements, improve risk management,
and enhance financial stability.

Key Objectives:
1. Improve bank resilience

2. Enhance risk management

3. Increase transparency

4. Promote financial stability

Main Components:
1. Capital Requirements:

- Common Equity Tier 1 (CET1) capital: 4.5% minimum

- Tier 1 capital: 6% minimum

- Total capital: 8% minimum

2. Risk-Based Capital Requirements:

- Credit risk

- Market risk

- Operational risk

3. Liquidity Requirements:

- Liquidity Coverage Ratio (LCR): 100% minimum

- Net Stable Funding Ratio (NSFR): 100% minimum

4. Leverage Ratio: 3% minimum

Implementation Phases:
1. Phase 1 (2013-2014): Capital conservation buffer

2. Phase 2 (2015-2018): Liquidity requirements

3. Phase 3 (2019): Full implementation

Benefits:
1. Enhanced financial stability

2. Improved risk management

3. Increased transparency

4. Better bank resilience

Prime Minister's Internship Program:

The Prime Minister's Internship Program is a prestigious internship scheme initiated by the Government
of India to provide opportunities to young professionals and students.

Objectives:
1. Nurture future leaders

2. Foster innovation and creativity

3. Enhance governance and policy-making

4. Develop skills and expertise

Eligibility:
1. Indian citizens

2. Age: 18-30 years

3. Graduate/Postgraduate students or professionals

4. Relevant academic background or work experience

Duration:
1. 6-12 months (variable)

Placement:
1. Prime Minister's Office (PMO)

2. Ministries/Departments of Government of India

3. Public Sector Undertakings (PSUs)

4. Autonomous Bodies

Benefits:
1. Stipend (up to ₹50,000/month)

2. Certificate from PMO

3. Networking opportunities

4. Hands-on experience in governance

5. Enhanced career prospects

Selection Process:
1. Online application

2. Screening and shortlisting

3. Written test/interview

4. Final selection by PMO

Notable Initiatives:
1. Prime Minister's Rural Development Fellowship (PMRDF)

2. Prime Minister's Urban Development Fellowship (PMUDF)

3. Prime Minister's Research Fellowship (PMRF)

Participating Organizations:
1. NITI Aayog

2. Ministry of Finance

3. Ministry of Human Resource Development

4. Ministry of Health and Family Welfare

5. Ministry of Environment, Forest and Climate Change

Statistics:
1. Over 10,000 applications received annually

2. 500+ interns selected since inception

3. 90% placement rate after internship

Canara Bank:
Canara Bank is one of India's largest public sector banks, established in 1906.

Key Statistics:
1. Founded: 1906

2. Headquarters: Bengaluru, Karnataka

3. Total Assets: ₹15.908 trillion (2024)

4. Deposits: ₹13.12 trillion (2024)

5. Advances: ₹10.11 trillion (2024)

6. Branches: 11,360 (2024)

7. Employees: 82,519 (2024)

History:
1. Founded by Ammembal Subba Rao Pai

2. Nationalized in 1969

3. Merged with Syndicate Bank in 2020

Products and Services:

1. Retail Banking
2. Corporate Banking

3. MSME Banking

4. Agriculture Banking

5. International Banking

6. Investment Banking

7. Insurance Services

8. Mutual Funds

9. Credit Cards

10. Digital Banking

Awards and Recognition:

1. "Best Bank Award" by CNBC-TV18 (2019)

2. "Best Public Sector Bank" by The Economic Times (2020)

3. "Best Bank for SME Lending" by The Asian Banker (2020)

Digital Initiatives:
1. Canara Bank Mobile App

2. Internet Banking

3. UPI (Unified Payments Interface)

4. Digital Wallet (Canara e-Wallet)

5. Online Loan Applications

Subsidiaries:
1. Canara Bank Securities Ltd.

2. Canara Robeco Asset Management Company Ltd.

3. Canara HSBC Oriental Bank of Commerce Life Insurance Company Ltd.

Role of Sponsor Bank in Regional Rural Banks (RRBs):

Sponsor banks play a crucial role in the establishment, management, and development of Regional Rural
Banks (RRBs) in India.

Key Responsibilities:
1. Promotion and Establishment: Sponsor banks facilitate the setting up of RRBs.

2. Equity Contribution: Sponsor banks contribute 35% of the RRB's equity.

3. Management Guidance: Sponsor banks provide managerial expertise and guidance.

4. Training and Development: Sponsor banks train RRB staff.

5. Financial Support: Sponsor banks provide financial assistance to RRBs.

6. Technology and Infrastructure: Sponsor banks share technology and infrastructure.

7. Regulatory Compliance: Sponsor banks ensure RRBs comply with regulations.

8. Strategic Planning: Sponsor banks participate in RRBs' strategic planning.

Benefits to RRBs:
1. Access to resources and expertise

2. Improved financial stability

3. Enhanced credibility

4. Better risk management

5. Increased efficiency

Benefits to Sponsor Banks:

1. Expanded rural presence

2. Increased customer base

3. Improved brand image

4. Contribution to financial inclusion

5. Business opportunities in rural areas

Eligibility Criteria for Sponsor Banks:
1. Public Sector Banks (PSBs)

2. Private Sector Banks (with minimum 5 years of experience)

3. Strong financial position

4. Good track record of rural lending

National Electronic Funds Transfer (NEFT):

NEFT is a popular electronic payment system in India, facilitating interbank transactions.

Key Features:
1. Electronic fund transfer

2. Interbank transactions

3. Non-instant, batch-processed settlements

4. No physical cheques or cash

5. Secure, reliable, and efficient

Benefits:
1. Convenience

2. Speed (settled in batches)

3. Cost-effective

4. Wide coverage (all banks participating)

5. Easy tracking

Eligibility:
1. Individuals
2. Businesses

3. Government institutions

4. Any bank account holder

Transaction Limits:
1. Minimum: ₹1

2. Maximum: No limit (varies by bank)

Charges:
1. NEFT transaction fees ( ₹2.50 to ₹25)

2. GST (18%)

Process:
1. Initiate NEFT transfer through:

- Internet banking

- Mobile banking

- Bank branch

- ATM

2. Provide beneficiary details:

- Name

- Account number

- IFSC code

3. Confirm transaction

Settlement:
1. Batch processing (multiple transactions)

2. Settlement cycles (usually 30 minutes)

3. Credit to beneficiary account

NEFT Timings:
1. Monday to Friday: 8 am to 7 pm

2. Saturday: 8 am to 1 pm

3. Sundays and holidays: Not available

Participating Banks:
1. All scheduled commercial banks

2. Regional rural banks

3. Cooperative banks

Real-Time Gross Settlement (RTGS):

RTGS is a payment system that enables real-time gross settlement of fund transfers between banks.

Key Features:
1. Real-time processing

2. Gross settlement (no netting)

3. Finality of settlement

4. Irrevocable transactions

5. No minimum/maximum amount limit

Benefits
1. Fast and secure transactions

2. Reduced settlement risk

3. Increased efficiency

4. Enhanced customer satisfaction

5. Simplified reconciliation

How RTGS Works:

1. Originating bank initiates transaction

2. RTGS system verifies transaction details

3. Destination bank receives transaction

4. Funds credited to beneficiary account

5. Confirmation sent to originating bank

RTGS Transaction Process:

1. Initiation: Originating bank initiates transaction

2. Verification: RTGS system verifies transaction details

3. Settlement: Funds transferred to destination bank

4. Confirmation: Originating bank receives confirmation

Types of RTGS Transactions:

1. Inter-bank transactions

2. Customer-to-customer transactions

3. Government transactions

Eligible Transactions:
1. Individual transactions

2. Bulk transactions

3. High-value transactions

RTGS Timings:
1. Monday to Friday: 9:00 AM to 4:30 PM
2. Saturday: 9:00 AM to 2:00 PM

3. Sunday and holidays: Closed

Charges:*
1. ₹2-5 lakh: ₹30 + GST

2. ₹5-10 lakh: ₹55 + GST

3. Above ₹10 lakh: ₹75 + GST

Cheque:
A cheque is a written instrument that orders a bank to pay a specified amount from the drawer's
account, payable on demand.

Types of Cheques:
1. Bearer Cheque: Payable to anyone presenting it.

2. Order Cheque: Payable to a specific person.

3. Crossed Cheque: Payable only through a bank account.

4. Open Cheque: Payable in cash or through a bank account.

5. Self Cheque: Drawn by the account holder for personal use.

Key Components:

1. Date

2. Drawer's name and signature

3. Payee's name

4. Amount (in figures and words)

5. Cheque number

6. Bank name and branch

Cheque Clearance Process:
1. Deposit: Payee deposits cheque in their bank.

2. Verification: Bank verifies cheque details.

3. Clearing: Cheque is sent to drawer's bank for clearance.

4. Settlement: Funds transferred to payee's account.

Cheque Validity:
1. 3 months from date of issue (India)

2. 6 months (some countries)

Cheque Return Reasons:

1. Insufficient funds

2. Signature mismatch

3. Date issue

4. Cheque expiration

5. Stop payment

Cheque Truncation System (CTS):

1. Electronic imaging of cheques

2. Faster clearance

3. Reduced errors

Digital Cheques:
1. Electronic Cheque (e-Cheque)

2. Digital Signature

3. Online cheque issuance

Advantages:
1. Convenient payment method

2. Easy to track

3. Secure transaction

Disadvantages:
1. Time-consuming clearance process

2. Risk of cheque bounce

3. Physical storage requirements

Demand Draft (DD):

A Demand Draft is a prepaid negotiable instrument used for making payments or transferring funds.

Key Features:

1. Prepaid instrument

2. Issued by banks

3. Payable on demand

4. Non-interest-bearing

5. Negotiable

Types of Demand Drafts:

1. Local DD (within city)

2. Outstation DD (inter-city)

3. Electronic DD (e-DD)

4. Telegraphic Transfer (TT)

How to Obtain a DD:

1. Visit bank branch

2. Fill DD application form

3. Pay DD amount + commission

4. Receive DD

Information Required:
1. Beneficiary name

2. Beneficiary address

3. Amount

4. Purpose of payment

Benefits:
1. Secure payment method

2. Easy to verify

3. No risk of dishonour

4. Wide acceptance

Charges:
1. Commission (0.5% to 1%)

2. Service tax (18%)

3. Stamp duty (varies)

Validity:
1. DD is valid for 3 months

2. Can be revalidated or cancelled

Cancellation:
1. Return DD to issuing bank

2. Fill cancellation form

3. Refund processed

Disadvantages:
1. Time-consuming process

2. Commission charges

3. Limited validity