A study on non performing assets management with reference to public sector banks, private sector banks and foreign banks in india

Abstract

Non Performing Assets (NPA‟s) are one of the major areas of concern for the Indian banking industry. Non-Performing Assets are like a double edged sword. They do not generate any income, whereas, the bank is required to make provisions such as assets. (Olekar and Talawar, 2012).NPAs do not just reflect badly in a bank‟s account books, they adversely impact the national economy. There are many research conducted on the topic of Non- Performing Assets (NPA) Management, concerning particular bank, comparative study of public and private banks etc. This paper considers the aggregate data of public sector, private sector and foreign banks and attempts to compare analyze and interpret the NPA management from the year 2009 -2013. On the conceptual side, it gives an overview of NPA, Types of NPA, causes and on the calculation side, it covers various NPA related ratios, use of Least square method for estimating Gross NPAs in the year 2014, and also application of ANOVA test to judge the presence of any significant difference between ratio of Gross NPA to Gross Advances. The findings reveals the percentage of Gross NPA to Gross advances is increasing for public banks, ratio of Loss Advances to Gross Advances are higher in foreign banks, the Estimated Gross NPA for 2014 is also more in public banks as compared to private and foreign banks and from the ANOVA test, it is concluded Ratio of Gross NPA to Gross Advances for public sector, private Sector and foreign Banks does not have significant difference between 2009 to 2013.