An Empirical Examination of Non-Performing Assets in Public Sector Banks

Beena S. Sheth; Dr. Haresh Vaishnani

Abstract

As banks are backbone for Indian economy any concern that effect to the banks can create trouble for the whole economy. And non-performing assets is one of that events that affect the profitability of banks. For financial institutions, especially banks, managing non-performing assets (NPAs) is a major concern that affects both their overall performance and financial health. Because the existence of non-performing assets negatively impacted the banking system's efficiency, attention has shifted to enhancing asset quality and risk management. This study uses a comprehensive strategy that integrates secondary data sources to evaluate the associated financial performance indicators, analyze various tactics and methodologies used for managing NPAs, and assess the present condition of NPAs in chosen institutions. The goals of the study include examining the connection between a bank's financial performance and its NPA. In this study the aim behind this paper is to compare the gross NPA and Net NPA of public sector banks. A variety of hypotheses pertaining to these goals are tested through statistical analysis. The goal of this study is to compare the nonperforming assets of a subset of public sector banks from (2017–18) to (2021–22). This research adds to the current conversation around NPA management in the banking industry and provides insightful information to stakeholders, financial institutions, and policymakers. Making well- informed decisions and influencing the direction of financial stability in the banking sector requires an understanding of the dynamics of non-performing asset (NPA) management and how it affects bank profitability