Assistant Professor, Department of Business Administration, Soffpro Institute of IT & Management, Preet Vihar, New Delhi, India.
Online published on 7 December, 2012.
Non Performing Assets is a threat to Indian Commercial banks. It affects liquidity and profitability, in addition posing threat on quality of asset and survival of banks. The Indian banking sector has been facing serious problems of raising Non-Performing Assets (NPAs). The main reason of high percentage of NPAs is the target-oriented approach, which deteriorates the qualitative aspect of lending. This study explored meaning of various NPA indicators; Gross NPA, Net NPA, Additions to NPA, Reductions to NPA and Provisions towards NPA. It is necessary to trim down NPAs to improve the financial health in the banking system.
In this paper, an effort has been made to evaluate the operational performance of the selected commercial banks, NPAs Trends and issues, the measures required for management of NPAs like reformulation of banks’ credit appraisal techniques, establishment of monitoring department, etc. The study concluded that NPA still remains a major threat and the incremental component explained through additions to NPA poses a great question mark on efficiency of credit risk management of banks in India.
Gross NPA, Net NPA, Additions to NPA, commercial banks. Private bank, foreign bank
