Loan Assets in New Private Sector Banks in India

The basic function of banks provided loan to customers on the basis of soundness of investment and quality of loan assets. This function is depending on the capability of credit risk of the banks. Credit risk is associated with lending highly and whenever a party enters into an obligation to make payment or deliver value to the bank. Credibility correlated with the factors of profitability and the long run sustenance of the bank and these factors depend on the income, expenditure, net interest income, NPAs and capital adequacy. When the money (Assets) is blocked, inadequate cash at hand this leads to borrowing of money for short period of time. This money is called Non-Performing Assets. Time and efforts of management cause indirect cost which bank has to bear due to Non Performing Assets. RBI feels that banks need to have a comprehensive system in which the process of risk monitoring is combined with proper risk assessment. This would entail creation and maintenance of an appropriate data base on risk assessment and credit extended, which would be required to be updated periodically. With this backdrop, an attempt has been made in the to examine the NPA of Private Sector Banks in India