Main Article Content
Abstract
Health of the financial system determines the development potential of any region or country. A well strengthened financial system is crucial to meet all kinds of macro-economic objectives. As banks are the major constituent of overall financial system in every economy, their efficiency and productivity is essential for the sound functioning of any economy. Banks need to possess sound quality of assets to work with competence and economic efficiency. Bad quality of assets makes the banking operations inefficient and economically non-viable. Swelling levels of Non-Performing Assets (NPAs) in Indian banks has become a matter of great concern among the bankers and policy makers. Present study investigates into the trend and composition of NPAs of different groups of Scheduled Commercial Banks in India. The study highlights that public sector banks witness the highest level of Non-Performing Assets and gross NPA Ratio of Public Sector Banks has constantly increased during the study period 2012-13 to 2017-18. Sectoral division of Non Performing Assets of public sector banks suggests that advances to the non-priority sector are causing growth in the stressed assets of public sector banks. Policy thrust on sound banking information system, well-defined credit policies, periodical review of all loan accounts, constant follow-up, time bound recognition and recovery of bad loans along with strict adherence to due diligence and KYC norms can help to address the problem.