Research Design of Credit Risk Management in Public and Private Sector Banks

Banks play an important role in the economic development of every nation. They have control over a large part of the supply of money in circulation. This paper examines the performance of public and private sector banks in India. Multiple regression model has used to compare the performance of public and private sector banks. Secondary data has used in this study.  Financial reports of 10 banks of public sector banks and 10 banks of private sector banks were used to analyze  performance of eleven years (2002-3 to 2012-13) comparing the return on asset, capital adequacy ratio and non-performing assets which was presented in multiple regression and correlation  to analyze the data. The study revealed that all these parameters have an positive impact on banks performance of public sector banks and inverse impact on banks  performance of private sector banks, however the non-performing asset is the most predictor of bank financial performance vis-a-vis the other indicators of credit risk management.