*Institute of Management Studies, Devi Ahilya University, Indore, Madhya Pradesh, India
**International Institute of Professional Studies, Devi Ahilya University, Indore, India
Online published on 11 December, 2013.
Non Performing Assets (NPA) has become a big challenge for banking industry. Growth of Indian banking industry was highest among all industries but increasing NPA is one of the big hurdles in growth. NPAs reflect the working performance and efficiency of banks. A high level of NPAs suggests high probability of a large number of credit defaults that adversely affect the profitability and net-worth of banks and also erodes the value of the asset. The NPA growth involves the necessity of provisions, which reduces the overall profits and shareholders’ value. The issue of Non Performing Assets has been discussed at length for financial system all over the world. Existence of Non Performing Assets in the banks not only affects the banks performance, but also the whole economy. NPA reflects the state of health of the industry and trade in country. NPA directly affect the profitability and cost of fund of banks. Increasing of NPA reduces the profit of banks, RBI continuously trying to reduce the losses of banks by giving by amending the norms of credit analysis of customers, giving standards/norms i.e. Basel I/II/III. The paper attempts to give basics of NPA and analyze aggregate changes in NPA of different banks’ groups. The paper has also put the important views and analysis based suggestions of some valuable researches done in this area.
