A comparative analysis of Non-Performing Assets (NPAS) of commercial banks in India

With the introduction of international norms for income recognition, asset classification and provisioning in the banking sector, managing NPAs has emerged as one of the major challenges facing Indian banks. 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. Nonperforming assets constitute a major portfolio of the Banks portfolio and hence are an inevitable burden on the banking industry. NPAs adversely affect the profitability, liquidity and solvency of the banks. This paper analyses the position of NPAs, policies pursued by the banking sector to tackle the NPAs and offers a multi-pronged strategy for speedy recovery of NPAs in banking sector.