NON-PERFORMING ASSETS: ROTS INDIAN BANKING SYSTEM

Abstract

Asset quality is one of the vital areas in determining the soundness of a bank. The rise in NPAs will directly have an impact on the major functioning of the banks. The credit distribution of the Scheduled Commercial Banks (SCBs henceforth) binds the working capital needs of the different sectors in the economy like Agriculture, Industry, Infrastructure, Power and Transport, Personal Loans and Household credits. Addressing the SCBs asset quality concerns and strengthening its balance sheets to reinvigorate credit growth is clearly the highest priority of RBI and the Government. The analysis revealed that the gross NPAs of public sector banks increased by 311.22% from 2013 to 2017. Likewise, the gross NPAs of private banks witness an increase of 269.47% from 2013 to 2017. The correlation analysis revealed that there exists a linear relationship between the Gross advances and GNPAs of all Bank groups.