The Indian banking system is considered as the heart of the financial system in the country. Banking organisations infuse money in the system resulting in additional purchasing power. In effect, banks mobilise funds from surplus units to deficit units, thereby pave the way for a sustainable economic development. Banks also play pivotal role in the socio-economic transformation efforts through supporting financial and economic policies of the government. Actually, by playing an all-round role as catalyst of development, commercial banks act as the back-bone of economic growth and prosperity of the country. A well-organised, efficient, planned and viable banking system is, therefore, a desired concomitant of an all-round development of the country. But all these requirements can be fulfilled only when banks are able to sustain a healthy bottom-line. But now-a-days, the mounting NPAs is the single most source of concern for the Indian banks; resulting in the Indian banks handicapped in performing their functions. In this backdrop, the present study attempts to assess the impact of NPAs on profitability of 26 public sector banks in India.
Non-performing assets, Public sector banks, Profitability, Bottom-line
