A Linear Goal Programming Application in Indian 
Commercial Banks for Loan Management

Avinash Gaur; Manisha Gupta; Prakash Chandra Mittal

doi:https://doi.org/10.14445/22315373/IJMTT-V71I1P101

International Journal of Mathematics Trends and Technology

Research Article | Open Access | Download PDF

Volume 71 | Issue 1 | Year 2025 | Article Id. IJMTT-V71I1P101 | DOI : https://doi.org/10.14445/22315373/IJMTT-V71I1P101

A Linear Goal Programming Application in Indian Commercial Banks for Loan Management

Avinash Gaur, Manisha Gupta, Prakash Chandra Mittal

Received	Revised	Accepted	Published
11 Nov 2024	25 Dec 2024	12 Jan 2025	30 Jan 2025

Abstract

This research focuses on applying Linear Goal Programming to optimize loan management in Indian commercial banks by considering the multi-criteria nature inherent in this critical banking function. Efficient loan management involves meeting conflicting goals, such as maximizing profitability and minimizing the risk of Non-Performing Assets - NPAs - amidst regulatory norms. Conventional methods often lag in satisfying these goals simultaneously. This paper, therefore, proposes an LGP model that integrates some major KPIs related to loan portfolios: loan growth targets, acceptable NPA ratios, targeted recovery rates, and desired profitability margins. Minimizing the deviations from pre-set goals gives a much more balanced, hence optimized lending strategy. This research will validate the efficiency and effectiveness of the proposed LGP model with real-world data from Indian commercial banks or simulated data based on industry trends. The model is solved using QSB+ software. By comparing the results generated by the LGP model with current banking practices, this research highlights the potential benefits of this quantitative optimization approach. The paper offers a useful framework for loan management in the Indian banking sector and is, therefore, of value to bank management and policymakers seeking to optimize lending operations and increase financial stability.

Keywords

Banking, Goal programming, Multi criteria decision making, Optimization, QSB.

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Citation :

Avinash Gaur, Manisha Gupta, Prakash Chandra Mittal, "A Linear Goal Programming Application in Indian Commercial Banks for Loan Management," International Journal of Mathematics Trends and Technology (IJMTT), vol. 71, no. 1, pp. 1-7, 2025. Crossref, https://doi.org/10.14445/22315373/IJMTT-V71I1P101