A critical review of non-performing assets in the Indian banking industry
Purpose – The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The purpose of this study is an effort to look into the contribution of the different banks individually to the NPA in the industry by looking into its growth pattern during the perio...
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| Format: | Article |
| Language: | English |
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Emerald Publishing
2019-12-01
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| Series: | Rajagiri Management Journal |
| Subjects: | |
| Online Access: | https://www.emerald.com/insight/content/doi/10.1108/RAMJ-08-2019-0010/full/pdf?title=a-critical-review-of-non-performing-assets-in-the-indian-banking-industry |
| _version_ | 1828344664978096128 |
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| author | Varuna Agarwala Nidhi Agarwala |
| author_facet | Varuna Agarwala Nidhi Agarwala |
| author_sort | Varuna Agarwala |
| collection | DOAJ |
| description | Purpose – The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The purpose of this study is an effort to look into the contribution of the different banks individually to the NPA in the industry by looking into its growth pattern during the period 2010-2017. Further, the study is made to look into the effect of different groups of banks, namely, State Bank of India (SBI) and its associates, nationalised banks and private sector banks on the banking industry in this regard. Design/methodology/approach – The individual private sector banks, nationalised banks and SBI and its associates have been considered for the purpose of the study. The analysis is based on secondary data collected from the Reserve Bank of India website for the period 2010-2017. The geometric mean has been used as a statistical tool for arriving at the mean growth rate of gross NPAs. Further, refinement of the result is done by comparing the growth of gross NPAs of individual banks with that of the average growth rate. Findings – The assessment of private sector banks reveals that the growth rate of NPAs is low as compared to the nationalised banks, as well as the SBI and its associates. The nationalised banks and the associate banks of SBI failed to handle the issue of poor loans effectively due to which the growth in such loans has been phenomenally high. Originality/value – The research is interesting as the study period follows the financial crisis. There is no such previous study that has looked at the perspective of banking from this angle. The research is valuable from two angles. Firstly, it brings to light the situation of the different categories of banks with regard to NPAs. Secondly, the information can be useful for investors as the issue of poor loans is a relevant one for them because it has an impact on the profitability of banks and thereby the future prospects. |
| first_indexed | 2024-04-13T23:59:42Z |
| format | Article |
| id | doaj.art-d17e3475ae8443bda0e83029658e0eb2 |
| institution | Directory Open Access Journal |
| issn | 0972-9968 2633-0091 |
| language | English |
| last_indexed | 2024-04-13T23:59:42Z |
| publishDate | 2019-12-01 |
| publisher | Emerald Publishing |
| record_format | Article |
| series | Rajagiri Management Journal |
| spelling | doaj.art-d17e3475ae8443bda0e83029658e0eb22022-12-22T02:23:44ZengEmerald PublishingRajagiri Management Journal0972-99682633-00912019-12-01132122310.1108/RAMJ-08-2019-0010635872A critical review of non-performing assets in the Indian banking industryVaruna Agarwala0Nidhi Agarwala1Department of Commerce, Vidyasagar University, Midnapore, West Bengal, IndiaDepartment of Commerce, Vidyasagar University, Midnapore, West Bengal, IndiaPurpose – The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The purpose of this study is an effort to look into the contribution of the different banks individually to the NPA in the industry by looking into its growth pattern during the period 2010-2017. Further, the study is made to look into the effect of different groups of banks, namely, State Bank of India (SBI) and its associates, nationalised banks and private sector banks on the banking industry in this regard. Design/methodology/approach – The individual private sector banks, nationalised banks and SBI and its associates have been considered for the purpose of the study. The analysis is based on secondary data collected from the Reserve Bank of India website for the period 2010-2017. The geometric mean has been used as a statistical tool for arriving at the mean growth rate of gross NPAs. Further, refinement of the result is done by comparing the growth of gross NPAs of individual banks with that of the average growth rate. Findings – The assessment of private sector banks reveals that the growth rate of NPAs is low as compared to the nationalised banks, as well as the SBI and its associates. The nationalised banks and the associate banks of SBI failed to handle the issue of poor loans effectively due to which the growth in such loans has been phenomenally high. Originality/value – The research is interesting as the study period follows the financial crisis. There is no such previous study that has looked at the perspective of banking from this angle. The research is valuable from two angles. Firstly, it brings to light the situation of the different categories of banks with regard to NPAs. Secondly, the information can be useful for investors as the issue of poor loans is a relevant one for them because it has an impact on the profitability of banks and thereby the future prospects.https://www.emerald.com/insight/content/doi/10.1108/RAMJ-08-2019-0010/full/pdf?title=a-critical-review-of-non-performing-assets-in-the-indian-banking-industrynationalized banksnon-performing assetsprivate sector bankssbi and its associates |
| spellingShingle | Varuna Agarwala Nidhi Agarwala A critical review of non-performing assets in the Indian banking industry Rajagiri Management Journal nationalized banks non-performing assets private sector banks sbi and its associates |
| title | A critical review of non-performing assets in the Indian banking industry |
| title_full | A critical review of non-performing assets in the Indian banking industry |
| title_fullStr | A critical review of non-performing assets in the Indian banking industry |
| title_full_unstemmed | A critical review of non-performing assets in the Indian banking industry |
| title_short | A critical review of non-performing assets in the Indian banking industry |
| title_sort | critical review of non performing assets in the indian banking industry |
| topic | nationalized banks non-performing assets private sector banks sbi and its associates |
| url | https://www.emerald.com/insight/content/doi/10.1108/RAMJ-08-2019-0010/full/pdf?title=a-critical-review-of-non-performing-assets-in-the-indian-banking-industry |
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