88Emerging threats to profitability of Indian banking industry

Indian banking industry is facing the severe problem of non-performing assets and this problem is faced by each and every bank or bank group of Indian banking industry. If the banking sector really wants to grow in profits and wants to compete with international standards of banking, it is necessary that the banks should reduce the amount and volume of NPAs. With this view in mind, a study is conducted w.r.t to various kinds of NPAs of scheduled commercial banks to priority and non-priority sector and role of various debt recovery channels in recovering the NPAs during the study period of 2011 to 2012. The study concludes that the gross and net NPAs of private Sector banks especially new private sector banks are minimum as compared to other bank groups. Priority sector NPAs of public and private sector banks shows a decline in 2012 as compared to 2011, but non-priority sector advances shows an increase in the same time period. As far as provisions for NPAs of all SCBs is concerned, though total provisioning increased at a higher rate, in sync with the higher growth of NPAs, the provisioning coverage ratio (PCR) shows a decline in 2012 as compared to 2011 and DRTs and SARFAESI Act are the two important channels for the recovery of NPAs of scheduled commercial banks.