1Assistant Professor, Department of Commerce, D.G. Vaishnav College, Arumbakkam, Chennai-600 101
2ICSSR Project Director, Professor and Head, Department of Commerce, University of Madras, Chennai-600 05
Online published on 16 January, 2016.
Higher non-performing assets lead the bank to collapse. One of the greatest risks involved in the banking sector is managing NPAs. This paper attempts to study the Perception of loan officers on the factors contributing to the incidence of NPAs in the banking industry in India. The researcher employs prinicipal factor analysis, K-means cluster analysis, Non Parametric Chi square analysis to study the perception of loan officers. Results reveal that three clusters were formed from factors oncauses for NP Asin both Public and Private sector banks in India are Aggressive Loan Officers, Scapegoat Loan Officers and Lethargic Loan officers. From the chi-square analysis it is found that there is no association between NPA causes with banking sector, gender, age group, education qualification, monthly income, banking sector experience, loan product experience, home loan product risk profile, consumer loan product risk profile, jewellery loan products risk profile, mortgage loan products risk profile, business loan products risk profile, personal loan products risk profile, loan against deposits, investments and insurance product risk profile, education loan products risk profile, and NRI loan products risk profile. It implies that the loan officers perceived same type of notions towards the causes for NPAs. The researcher concludes that there is an association between causes for NPAs and other loan products risk profile. It implies that loan officers agreed products not available, low risk, moderate risk and high risk of other loan product have perceived different type of notions towards the causes for NPAs.
NPAs, Loan officers, Risk profile, NRI Loan, Financial Institutions
