Sectoral Analysis of NPAs of Select Private and Public Sector Banks

Banking industry plays very crucial role in the socio-economic development of a country like India. Nationalization of the banks has obligated the banks to lend money to certain sectors which are deprived socially and economically. Agriculture, small scale industries and weaker sections in the society are collectively called as priority sector. There are some doubts on lending to priority sector with the background of mounting of Non-performing assets (NPAs) in the balance sheets of the banks. In this juncture, the present paper investigates the tendency of NPAs in selected private and public sector banks with reference to priority sector and non-priority sector and activity-wise. To reach out the objectives of the study exclusively secondary data have been used. Simple percentages, ratios and coefficient of correlation techniques were used to analyse the data. The study concludes that the proportion of priority sector in total NPAs is higher in public sector. Of the two private sector banks, the trend is better in the DB Ltd as compared to ICICI Bank Ltd. Further, of the four sample banks, the mean ratio of NPAs to priority sector was the highest in the SBI followed by CBI, DB Ltd and ICICI Bank Ltd.