A Study of Non-performing Asset Management as a Strategic Approach to Ensure Sustainability among the Public Sector Banks in India

The year 2019 marked the completion of 50 years of banking nationalisation in India. Since 1969 (first phase of nationalisation of banks), the banking system has grown in wealth, asset-base and size. However, such growth has left behind piles of Non-performing Assets (NPA), affecting its profitability and exposed management inefficiencies. Initiatives have been taken for recovering such loans from time to time, but without many upshots. The Asset Reconstruction Companies (ARCs) and the Debt Recovery Tribunals (DRTs) have failed over the years to recover such NPAs. Hence managing such NPAs became the most crucial challenge for the banks. The following study focuses on the individual practices of the banks to manage NPAs. This study formulates the strategies which would help them in managing their NPAs. The paper has focussed on the Public Sector Banks (PSBs) since they dominate the industry with their strong presence and huge market share. The uniqueness of the paper has been the formulation of strategies to control and manage NPAs, which would work as a complement to the Reserve Bank of India (RBI) policies.