Banking Industry plays a very important role in economic development of a country through extending credit to various deficit sectors and earn income in the form of interest on advance and other incomes like commission, consultancy fee etc. But the credit creation activity creates credit risk to the bank which results in nonperforming assets. The current study has been undertaken to study nonperforming assets of SBI, one of the biggest lender in India which has approx twenty percent share in loan market. NPA is one of the important parameter in analysing the performance of bank as it reduces the profit margin and increases the carrying cost of such nonperforming assets in the form of provision for doubtful debts and bad debts. The motive of study on SBI is to assess the NPA of the bank and to make a comparison between total advances, nonperforming assets and net profit. Here the data has been analysed using comparison table and Pearson correlation coefficient used to check relationship between net profit and net nonperforming assets. When data of total advance, nonperforming assets and net profit has been studied, it reveals mismanagement on the side of SBI. While analysing the impact of net nonperforming assets on net profit of the bank for last nine years, conclusion has been derived that a positive correlation between two which simply means as profit increases, NPA also increases. It is because of poor NPA management on the side of bank.
NPA, Net Non Performing Assets, Gross Non Performing Assets, SBI, Net Profit, Mismanagement
