The Behaviour of NPA between Public and Private Sector Banks: A Deep Review

Author(s): Shri Hari S, Surbhi Yadav and Dr. James Thomas

Abstract:

As financial intermediaries, commercial banks rely heavily on the performance of their lending as a critical source of revenue. The share of non-performing advances has increased significantly in recent years as a result of increasing loan failures, reducing their profitability. The paper investigated the relationship between NPAs and profitability by estimating the profitability determinants of two public and private sector banks from 2018 to 2022. We discovered that NPA has a negative impact on the profit rate of Indian banks using a set of bank specific and macroeconomic predictors of profitability. According to the study, banks must reduce their NPAs and operating costs in order to improve their profitability.

Keywords: Public Sector Banks, Private Sector Banks, Non-Performing Assets (NPAs), Gross NPA, Net NPA, Correlation, NPA Management.

Pages: 19-23      |       205 View       |       24 Download