A Study of Effect of NPAs on the Financial Performance of Public Sector Banks in India

By : Preeti , Kuldip Singh Chhikara

Page No: 70-78

Abstract
Presently, the Indian Banking System is passing through an uncertain phase of distress due to growing NPAs (Non-Performing Assets) having negative impact on the performance of the banks in particular and growth & development of the nation in general. The present study is purely based on secondary data collected from various sources and were analyzed with the help of appropriate statistical techniques such as Mean, Standard Deviation, CAGR, Diagrams, and Charts, etc. to draw the conclusions. A very high degree of negative correlation was found between NPAs and ROA & ROE of the PSBs indicating towards a very high degree of negative impact of NPAs on the banks’ financial performance. It was exposed through the results of the study that the problem of bad loans has matured with the passage of time due to irresponsible role played by the top level management of public sector banks in general and the regulatory authorities in particular. Further, the populist government schemes have also told upon the health of the banks and hence serious and stringent actions and decisions are required to be taken and implemented at various levels not only by banks but also by RBI, other regulatory authorities and GOI to boost the financial position of the banks in general and of the economy of the country in particular.

Authors :
Preeti : Research Scholar, Department Of Commerce, Maharishi Dayanand University, Rohtak.
Kuldip Singh Chhikara : Professor, Department of Commerce and Director DDE, Maharishi Dayanand University, Rohtak.
 

DOI: https://doi.org/10.32381/PROD.2019.60.01.7