A Descriptive Study on Non-Performing Assets of Indian Banks

Abstract

Banking Industry is one of the rapidly growing industries in India and is expanding very fast; it is the industry which requires larger amount of workforce, better technological and infrastructure facilities. There has been tremendous increase in the credit flow to various sectors of the economy such as infrastructure, industry, services and agriculture. Even though there is market growth in all the sectors of the economy the quality of assets is deteriorating day by day. NPAs have direct impact on the profitability and the net worth of the banks. The banks have to focus on the problems on NPAs in detail. The balance sheet of the bank is not always based on its balance sheet but it is also based on the level of return on its assets. The level of NPAs best indicates the soundness of banking industry of the country. A healthy financial sector focuses on the growth of the economy, and for the healthy financial sector we need to maintain the financial soundness of the bank. But the bank is overburdened with problem of rising NPAS. The present study focuses on various issues and future impacts of NPAs in Indian Banks. The problem of losses and lower profitability of NPA depends on how risk is managed in their business.