DECODING NPA TRENDS: A COMPARATIVE ANALYSIS OF ASSET QUALITY IN SELECT PUBLIC AND PRIVATE SECTOR BANKS IN INDIA
DOI: https://doi.org/10.5281/zenodo.22944026
Dr. SUBBARAYUDU THUNGA, Dr. B. KRISHNAIAH, Dr. D. KALYANI, Dr. A S PRASAD, Dr. S. SHYAM SUNDAR
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Keywords:
Non-Performing Assets, Public and private Sector Banks, Asset Quality, Financial Performance, Credit Risk Management.
Abstract:
Non-Performing Assets (NPAs) have become one of the major challenges affecting the stability and profitability of the Indian banking sector. NPAs refer to those loans or advances on which the principal or interest payment remains overdue for more than 90 days. The increasing level of NPAs negatively impacts the financial performance, liquidity, and operational efficiency of banks. This study focuses on the comparative analysis of NPAs in selected public and private sector banks in India. The main objective of the study is to examine and compare the Gross NPA and Net NPA levels, profitability, and asset quality of selected banks from both sectors. The study is based on secondary data collected from annual reports, RBI publications, and other banking reports for a specific period. Various financial indicators such as Gross NPA Ratio, Net NPA Ratio, Return on Assets (ROA), and profitability ratios are used for analysis. The study reveals that public sector banks generally have higher NPA levels compared to private sector banks due to factors such as weak credit appraisal systems, political interference, and ineffective recovery mechanisms. On the other hand, private sector banks maintain better asset quality and efficient risk management practices. The findings indicate that rising NPAs reduce the profitability and operational efficiency of banks and create a burden on the overall economy. The study concludes that effective credit monitoring, strict recovery measures, proper risk assessment, and improved loan management practices are essential to control NPAs in both public and private sector banks.