Study of the Effect of Non Performing Assets (NPA) and Earning Per Share (EPS) of Public and Private Commercial Banks of India on their share Prices (2011 to 2015)

There are two types of NPA-Gross NPA and Net NPA. For present study Net NPA are considered. This paper is an attempt to correlate the NPA and share prices of Indian commercial Banks. Though the sample size is small but all major 11 banks (6 Public sector banks and 5 Private sector banks) where chosen for the study. 2010–11 to 2014–15 is the study period for this study. It is found that In the period of 4 years, NPA increase rate is higher in public sector banks than the private sector banks. NPA of private sector banks are well under control. This study shows that there is insignificant and negative correlation of NPA change and share prices change of Public sector banks. But in case of private sector banks it is positive correlation. It is found that instead of NPA change, EPS change is more correlated with share prices change in case of Indian commercial banks where the correlation is positively high.