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Purpose: Credit risk has become a serious issue in the present scenario. No banking transactions are free from credit risk. Banks can survive in the modern world only if they can manage the risk efficiently. The study is been undertaken to find out the different types of loans provided by Canara Bank and the rate of default resulting in NPA over 5 years. The author mainly considered the study on loans provided by Canara Bank and the credit risk encountered by the bank due to non-payment of loans and the interest amount on the due date.
Methodology: Qualitative research is grounded on secondary data. Information is gathered through annual reports, manuals, previous bank records and balance sheets. For depth information, Focus group interactions with the manager and the staff are carried out.
Findings: Better credit risk policy of the bank reduces the NPA percentage which in turn increases the profitability of the bank.
Originality: The study highlights the effect of profitability due to credit risk arising out of NPAs.
Paper type: Case study