“A Conceptual Study on Non-Performing Assets in Cooperative Banking: Challenges, Prevention Strategies and Best Practices”
YOGEETA BC, Dr. Leela M.H
Non-Performing Assets (NPAs) continue to be one of the major challenges affecting the performance and sustainability of the banking sector, particularly cooperative banks. An increase in NPAs reduces the quality of loan portfolios, affects operational efficiency, and limits the ability of banks to extend fresh credit. This conceptual study aims to examine the nature, causes, challenges, and preventive strategies related to NPAs in cooperative banking based on secondary data collected from published research articles, reports, books, and official publications. The study discusses the classification of NPAs, the factors responsible for loan defaults, and the significance of effective credit appraisal, loan monitoring, and technological support in minimizing NPAs. It also highlights various best practices adopted by banks to improve recovery mechanisms and strengthen risk management. Since the study is conceptual in nature, it does not include confidential organizational information or financial data from any specific bank. The findings indicate that timely monitoring, proper credit assessment, digital technologies, and customer awareness are essential for improving asset quality and maintaining financial stability. The study concludes that a proactive approach towards credit management and effective governance can significantly reduce the occurrence of NPAs and contribute to the long-term growth of cooperative banks..