Impact of Non-Performing Assets on the Financial Sustainability of Salem District Central Cooperative Bank

Non-Performing Assets remain one of the key challenges to the financial sustainability of District Central Cooperative Banks, and Salem DCCB is no exception. As the intermediate institution in the short-term cooperative credit system, the Bank's financial health is of primary importance in sustaining institutional credit to the farmers and rural borrowers of Salem district. The trend analysis of Gross and Net NPA ratios, profitability, capital adequacy, and recovery performance undertaken in this study provides a detailed picture of the Bank's financial sustainability over the six-year study period. The evidence indicates that uncontrolled NPA growth can substantially erode profitability and capital strength, while focused recovery and credit-appraisal measures can reverse this decline. To sustain its financial strength and continue its developmental role, Salem DCCB requires a combination of robust credit appraisal, effective monitoring, sound recovery management, and continued policy support from NABARD and the state government.

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