An insight into the Non-performing Assets of Indian Commercial Banks

Abstract

This paper is a modest attempt to examine the Non-Performing Assets (NPAs) of Indian commercial banks from different dimensions. Secondary data on 40 listed Indian commercial banks were collected from ‘Capitaline Plus’ corporate database for a period of 10 years from 2009 to 2018. The study’s findings indicate an increasing trend of both gross and net NPA ratios of Indian scheduled commercial banks over the years during the study period. The role of big corporate borrowers in this accumulation of NPAs is very important. In this respect, the study finds that the performance of Public Sector Banks (PSBs) (both large and small banks) was very serious in respect of bad loans in comparison to Indian Private Sector Banks (PrSBs). Overall the results indicate that the quantum of NPAs is an alarming factor for the stability of Indian commercial banks in general and PSBs in particular. There is a need to introduce further reformative steps to manage the bad loan portfolio of Indian commercial banks and to build a resilient banking system.