A Comparative study of non performing assets of public and private sector banks in India

The banking industry has undergone a sea change after the economic liberalization, globalization and privatization. The presence of NPA has an adverse impact on the banking system of India. According to Reserve Bank of India,”Reduction of NPAs in the Indian Banking sector should be treated as a national priority item to make the system stronger, resilient and geared to meet the challenges of globalization.The ASSOCHAM study titled-Solvency Analysis of the Indian Banking sector reveals that on an average 24 percent rise in net non performing assets have been registered by 25 public sector and commercial banks during the second quarter of the 2009 as against 2008. In this paper an attempt has been made to evaluate the operational performance and the efficiency of managing managing NPA of some selected public sector banks and private sector banks of India for a period of ten years with the help of various ratios. The data has been collected through secondary sources. All the Indian banks are facing hard time managing their NPA. The magnitude of NPA was comparatively higher in public sectors banks compared to private banks under study but now, they have managed the number at lower end.