A Study on the Causes of Non-Performing Asset in Selected Co-operative Banks in Pune

Banking is a dynamic business activity prevalent across the world.It helps in capital formation for an economy with the help of saving and investment function. Accumulation of saving and lending of money is prime function of any bank. Lending money involves risk because it is the not the bank money but the depositors’ money who need their money back when demanded. Thus effective asset allocation is essential for a bank to grow and succeed. There is no doubt that increasing Non - Performing Asset commonly known as NPA has become a crucial concern for any bank whether it is commercial or co-operative. There are instances where many co-operative banks have faced strict action and closure from the central bank. Thus, the paper is an attempt to study and analyse the causes of NPA in selected co-operative banks in Pune. It studies the causes of NPA at the micro level for co-operative banks and brings out the major causes responsible for assets turning into non- performing.