Analytical Study of Non-Performing Assets of Public and Private Sector Banks in India

Analytical Study of Non-Performing Assets of Public and Private Sector Banks in India Abstract: The Indian banking system plays an active role in running the sectors of the economy. In the current situation, banks face difficulty in providing financial support to the sectors due to non-performing assets. Hence, monetisation of non-performing assets is necessary. Therefore, this paper attempts to analyse the trends of non-performing assets of public and private sector banks over time. Secondary data throughout the twenty-three (2001-2023) years was collected from various publications of the RBI. This study considered a few variables, like gross NPA and net NPA of public sector and private sector banks. It was observed that non-performing assets of public sector banks were higher than those of private sector banks over the study period. The study found that a series of non-performing assets follows a stochastic trend pattern rather than a linear one. An independent t-test has been employed to investigate apparent variation in the non-performing assets held by public and private sector banks. Although the NPA has been recovered, they are not yet under control, especially for public banks. Therefore, there is a need for consistency in NPA recovery.