Recovery Performance of Indian Commercial Banks-An Analysis

Banks have traditionally played the key role in the financial system by acting as financial intermediaries between ultimate servers and borrowers. With liberalization, competitions among commercial banks have increased to lure the customers. They are competing among themselves to attract more and more prospective applicants for loans; in their quest for attracting more and more customers for loans most of the banks have sanctioned loans without taking applicants capacity to repay loan its consideration. Non Performing Assets (NPA's) are one of the major areas of concern for the Indian banking industry. Non-Performing Assets are like a double edged sword. They do not generate any income, whereas, the bank is required to make provisions such as assets. (Olekar and Talawar, 2012). NPAs do not just reflect badly in a bank's account books, they adversely impact the national economy. It is the most worrying aspect as banks are expected to follow prudential norms quoted in Basel I, II and III norms. There are many research conducted on the topic of Non-Performing Assets (NPA) Management, concerning particular bank, comparative study of public and private banks etc. This paper evaluates the recovery performance of public sector and private sector banks and attempts to analyze and interpret the NPA management from the year 2007–2015. Present study has focused on analyzing the level of NPAs in Indian commercial Banks with special reference to recovery performance of public sector and private sector banks. For the purpose of study the researcher has chosen two public sector banks and two private sector banks and analyzed the results by using simple statistical techniques.