“A study of non-performing assets of commercial banks in India”

Bank plays a vital role in the economic development and growth of a country. In a developing country like India, there is a need of efficient and healthy banking system. Growing non-performing assets is a persistent problem in the Indian banking sector. The banking sector has been facing serious problems of raising Non-Performing Assets. The Non-Performing Assets growth has a direct impact on profitability of banks. From past few decades NPA has become a big threat for the growth of banking sector. In the present scenario, the core financial problem for banks is NPA. Non-performing assets reflect the performance of banks. In addition it poses threat on quality of assets and survival of banks. The recommendations of Narsimham committee and Verma Committee, some steps have been taken to solve the problem of old NPAs. There seems to be no unity in the suitable policies to be followed in resolving this problem. The issue of NPAs is not only affecting the banks but also the whole economy. It is essential to trim down Non-Performing Assets to boost the financial health in the banking system.

In this paper an attempt is made to understand NPA factors contributing to NPAs, reasons for high impact of NPAs on commercial bank in India, the status and trend of NPAs in Indian Scheduled commercial banks, the factors contributing to NPAs. Proper recovery of loans can boost the performance of banks. Therefore, an attempt is made in this paper towards examining the effectiveness of NPA recovery measures. One of the reason for the poor recovery from NPAs is that, the mechanism created for this purpose are not effective that's why banks are not able to derive full benefits from these.