A COMPARATIVE STUDY ON NON PERFORMONG ASSETS (NPA) IN PUBLIC SECTOR BANKS AND PRIVATE SECTOR BANKS

The banking sector is the backbone of a country’s financial system and plays a crucial role in economic development by mobilizing savings and providing credit for productive activities. However, one of the major challenges faced by the banking industry today is the problem of Non-Performing Assets (NPAs). The study focuses on a comparative analysis of Non-Performing Assets (NPAs) between public sector banks (PSBs) and private sector banks (PVBs) in India. The primary aim is to evaluate the asset quality of banks using Gross NPA (GNPA) and Net NPA (NNPA) ratios. The research further examines the relationship between GNPA and NNPA to understand how provisioning reflects the real level of financial stress in banks. It also analyses the impact of NPAs on the profitability and overall performance of both public and private sector banks. The findings reveal that public sector banks generally face higher NPAs due to weak credit appraisal and policy constraints, while private banks maintain better control through improved monitoring and technology-driven management. The study concludes with suggestions to minimize NPAs and enhance the overall efficiency of the banking system.