A STUDY OF NON-PERFORMING ASSETS OF CO-OPERATIVE BANKS IN INDIA WITH SPECIAL REFERENCE TO THE FINANCIAL YEAR 2022–23

Abstract

Co-operative banks occupy a distinctive place in India’s financial architecture because they combine the institutional form of banking with a community-oriented and member-based philosophy. Their financial sustainability, however, depends substantially on the quality of loans and advances. Non-Performing Assets (NPAs) weaken interest income, require provisioning, constrain fresh lending and may erode depositor confidence. This research paper examines the NPA position of co-operative banks in India with special reference to FY 2022–23, concentrating on Urban Co-operative Banks (UCBs), for which the Reserve Bank of India provides comparable end-March 2022 and end-March 2023 data. The study adopts a descriptive and analytical secondary-data methodology. It finds that Gross NPAs of all UCBs declined from ₹32,307 crore in March 2022 to ₹29,210 crore in March 2023. The Gross NPA ratio declined from 10.3 per cent to 8.8 per cent and the Net NPA ratio from 2.9 per cent to 2.1 per cent, while the Provision Coverage Ratio increased from 71.3 per cent to 75.7 per cent. The improvement was visible in both scheduled and non-scheduled UCBs, although non-scheduled UCBs continued to carry a higher GNPA ratio. RBI associated the improvement partly with lower slippages and stronger loan recovery. The paper concludes that FY 2022–23 reflects meaningful strengthening in UCB asset quality, but continued attention to governance, credit appraisal, early-warning systems, recovery, internal audit, risk management and technology remains essential.