Indian banking industry has undergone several changes during the liberalization process. However, one nagging problem affecting the banking sector has been the high level of non- performing assets. High non-performing assets affect the profitability, productivity, capital adequacy and competitiveness of banks. Management of NPAs, therefore, assumes significance in management of banks. Regulators and policy makers for banks have been taking measures to bring down the level of NPAs in Indian commercial banks. Present paper analyses the trends of NPAs in the last fifteen years in Public and Private sector banks. Category wise analysis shows that the public sector banks have higher levels of NPAs in comparison to private sector banks. Sector wise analysis reveals that priority sector lending accounts for major proportion of NPAs in public sector banks, while non-priority sector lending accounts for major proportion of NPAs in private sector banks. The lasting solution to the problem of NPAs can be achieved only with proper credit assessment and risk management mechanism.
Debt Recovery Tribunals, Management of NPAs, Recovery of NPAs, Securitization Act, SRFAESI
