Trend of Non-performing Assets (NPAS) of Indian Commercial Banks-An Analysis

Banking and financial institutions play a pivotal role in the development of an economy especially in the mobilization and allocation of resources. The sound financial position of a bank is the guarantee not only to its depositors but equally important for the whole economy of any country. Stability of banking sector is considered to be an essential aspect of any country in the world. The banks are lending funds as loans and advances to various sectors such as agriculture, industry, personal and housing and other to meet the productive use of these funds. In recent situations, the banks are facing the problems of Non-Performing Assets (NPAs) and the banks need to be very cautious in extending loans to the needy people, the reason being mounting of NPAs. Now -a –days Non-Performing Assets has been the single largest cause of nuisance of the Indian banking sector. Non-Performing Assets are those assets on which the interest or principal have not been paid by the borrower for the specified period in accordance with the directions/guidelines issued by Reserve Bank of India (RBI) which is the Central Bank of India. The paper emphasizes the conceptual framework of Non-Performing Assets known as NPA in the banking sector. It further discusses and analyses the trend of NPAs in the three sectors of banks namely public sector banks, new private sectors banks and foreign banks for the preceding period of ten years (2007-08 to 2016-17). Finally, this study covers the measures to be taken to reduce the menace of NPA in banks. Keywords: Non-Performing Assets, Scheduled Commercial Banks, Advances, Gross NPA, Net NPA.