Impact of Non-Performing Assets on State Bank of India , Hyd – A STUDY

This study explores the impact of Non-Performing Assets (NPAs) on the financial performance and operational efficiency of the State Bank of India (SBI) from 2021 to 2025.NPAs refer to loans where the borrower fails to repay the principal or interest for more than 90 days, causing a direct hit to a bank's profitability and lending capacity.The research highlights a significant decline in SBI's NPAs during the study period, alongside a steady increase in total advances, indicating improved credit management, recovery mechanisms, and asset quality.The NPA ratio dropped across all loan segments-personal, home, business, agricultural, and priority sectordemonstrating SBI's robust approach to reducing financial risk and enhancing operational strength.The study relies on both primary and secondary data, including interviews with SBI officials and analysis of bank reports.Key findings suggest that while SBI faced challenges related to rising NPAs in earlier years, the bank has successfully implemented strategies like tighter credit monitoring, improved legal recovery processes, and digital tools to manage and minimize NPAs effectively.In conclusion, the study emphasizes the importance of continuous monitoring and strong policy interventions in managing NPAs.It also reinforces that reducing NPAs is essential for ensuring financial health, public trust, and economic stability in India's banking sector.