ANVESHAK-International Journal of Management

Yasmin A. Barodawala ¹

Affiliations
1 Assistant Professor, Dr. Thakorbhai Patel Girl’s Commerce College, Vadodara – 390015, Gujarat, IN

Abstract

To scrutinize and scan the optimization of banks and its functioning, a world-wide famous and robust indicator DuPont analysis model is implemented confidently since ages. This model has had experience of putting not only banks, but also companies and industries of diversified sections, under estimation. Union Bank of India of public sector is opted for contemplating its performance through DuPont model in this paper. Scrutiny period is designed of 10 years from 2012-13 to 2021-22. Employing the secondary data, trend of Union Bank is examined considering ratios of net profit margin, total asset turnover, equity multiplier and return on equity. Mean, standard deviation, coefficient variance and CAGR (%) is computed along with establishing the correlation between ROE and its financial components using SPSS software 26.0. The overall inferences drawn states that ROE shows fluctuating trend and EM is inversely related to ROE whereas NPM and TAT are positively related to ROE and NPM reveals a very strong relationship with ROE.

Keywords

DuPont Model, Equity Multiplier, Net Profit Margin, Performance Evaluation, ROE, Total Asset Turnover

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Yasmin A. Barodawala ¹

Affiliations
1 Assistant Professor, Dr. Thakorbhai Patel Girl’s Commerce College, Vadodara, Gujarat, IN

Abstract

A medium to save the Banks from rising NPA is ARC - Asset Reconstruction Companies. But, when ARC’s efforts turned out to be insufficient for handling the bulging amount of bad loans; Bad Bank was brought into the picture by the Government of India. Backed by the full-fledged hand of the Indian Government, unlike the existing ARCs, NARCL-National Asset Reconstruction Company Ltd is the first-ever Bad bank in the country. The statistics of recent past years reflect a downtrend of Bad loans in the never-ending trail of NPA of the country. Yet, we cannot relax in slumber because the graph is still not low. Especially when talking regarding public sector banks, the downward slope is still quite high. It’s a good omen that Government realizes the need to act upon these vicious bad loans and has introduced NARCL, which is enthusiastically assembling itself, working towards taking up the stressed assets of NPA-laden banks and showing a sign of hope and relief to the economy. This paper is an attempt to highlight the concept of a Bad bank, its structure, working, criticisms, and prospects. As this NPA sweeper Bank, ’Bad bank’, initiates its functioning, we are all heads to see whether it stands to fulfil its objectives or entwines and ravels in the grind of NPA.

Keywords

Bad Bank, Bad Loans, Stressed Assets, NARCL, NPA

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