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Asian Journal of Research in Banking and Finance
Year : 2014, Volume : 4, Issue : 5
First page : ( 232) Last page : ( 247)
Online ISSN : 2249-7323.

Comparative Evaluation of Non Performing Assets of Indian Banks: A Study of Public and Private Sector Banks

Dr. Murari Krishna

Assistant Professor, FASC, Mody University of Science and Technology, Sikar, Rajasthan, India

Abstract

The strength and soundness of the banking system primarily depends upon the quality of the assets. Non Performing Assets (NPA) is one of the major concerns for banking system in India. In this paper we have made an attempt to analyze how efficiently public and private sector banks managed their NPAs. Secondary data has been collected for the selected categories of the banks from the RBI publications for a period of thirteen years i.e. from 2001 to 2013. The data has been analyzed using percentage and ratio method, and selected statistical tools such as least square method for trend projection and one-way ANOVA. Our results reveal that public sector banks have witnessed a continuous increasing trend in gross and net NPAs in comparison to private sector banks and there is statistical significant difference in the mean of gross and net NPA of public and private category of Indian banks. However there is no significant difference in gross and net NPA ratio of both PSBs and PrSBs which indicates that public and private sector banks are trying hard to reduce their NPA ratios consistently due to the regulatory and supervisory pressure. Lastly, measures for NPA management is explored which concludes that, besides the preventive and corrective measures of NPA management, the role of technology in managing and warning the officials in advance seems to be crucial.

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Keywords

Public Sector Banks, Private Sector Banks, Non Performing Assets (NPAs), Gross NPA, Net NPA, ANOVA, NPA Management.

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