Analysis of non-performing assets in the Indian Banking Industry

Banks play a very important role in the development of a country. They are the growth drivers but are also exposed to a number of risks. Banks today are judged not only on the basis of number of branches and volume of deposits but also on the basis of quality of assets. The Indian banking sector today is facing a serious problem of Non- Performing Assets despite various acts such as DRT and SARFAESI Act. The paper tries to understand the trends of NPAs in the Indian Banking sector(Public, Private and Foreign) and also analyse the sector wise influence of NPAs. It also aims to analyze whether there is any difference in NPA occurrence between various banks and tries to ascertain relationship between NPAs and ROA. The authors’ have taken the data for more than __ Years of the Indian banking industry and have used statistical tools like Descriptive Statistics, ANOVA Single Factor, independent t- test, post hoc analysis, Karl Pearson's Coefficient of Correlation. The findings SPSS reveal that the NPA of public sector is highest and has increased significantly whereas in private sector the percentage growth has come down. The paper also shows the negative relation between the NPAs and profitability of the bank. Moreover, it reveals that for public sector banks, priority sector NPAs are not significantly different from that of non- priority sector.