Dimensions of non-performing assets in urban cooperative banks in Tamil Nadu Ramu, N.

The Urban Cooperative Banking (UCB) system has come a long way since 1904 when the first UCB was started at Kancheepuram in Tamil Nadu. UCBs remain not-for-profit, owned and controlled by the members who use their services. They are unit banks of the American model rather than branch banks of the British model. With the tightening of prudential norms, the banking sector has been consistently conforming to and adopting international prudential norms and accounting practices. Such strengthening of prudential norms have resulted in increased levels of Non-Performing Assets (NPAs) for the Urban Cooperative Banking Sector. As per CAMELS rating model, the highest weight is given to asset quality components. Today, UCBs are compelled to maintain superior asset quality in the competitive market for their survival. In the wake of large scale defaults of UCBs in India, this study is an attempt to analyze the asset quality in select UCBs in Tamil Nadu. This paper also traces the Non-Performing Assets of financial cooperatives in other countries. A comparison of UCBs with financial cooperatives abroad is also done.