*Assistant Professor, Department of Management Studies, Christ University, Bengaluru, India. manu.ks@christuniversity.in
**Student, Department of Management Studies, Christ University, Bengaluru, India
Online published on 2 July, 2018.
The Non-performing assets have been changing from time to time which impact the bank's profitability. If the bank's profitability and productivity is affected, the money of the shareholders are also affected. This leads to impact of the financial growth of the economy. Developments banks are multipurpose financial institutions which provide financial support to business units. The study pertains to analyze the impact of non-performing assets on development banks profitability. The study considers two development banks (IFCI and IDBI). Further the study considers ROA, ROE and ROCE as measures bank's profitability, Gross NPA and Net NPA as measures non-performing assets of the banks. The study used multiple regression analysis to analyze the impact of non-preforming assets on banks profitability. The regression results found that net NPA has negative impact on profitability of IFCI. Thus, decreases in net NPA results increase in ROA, ROCE and ROE of IFCI bank during the study period. The regression results not supported any impact of NPA on profitability of IDBI. The study suggests stringent policies to be implemented by regulatory authorities to curb continuous rising of Banks's NPA which will hedge loss of tax payer's money in India.
Non-performing assets, Profitability, Development Banks and Policies
