Open AccessImpact of NPA on Profitability of Banks
Author(s) -
Ritu Wadhwa,
K. Ramaswamy
Publication year - 2020
Publication title -
international journal of engineering technology and management sciences
Language(s) - English
Resource type - Journals
ISSN - 2581-4621
DOI - 10.46647/ijetms.2020.v04i03.001
Subject(s) - profitability index , loan , asset (computer security) , non performing asset , business , financial system , private sector , agriculture , finance , asset management , economics , economic growth , computer science , computer security , ecology , capital asset pricing model , biology
The main source of growth for Indian Economy is Banks. Everyone has different needs like someone require loan to buy a house, to buy an equipment for farming etc. and these needs are fulfilled by the financial sector of India which comprises of banks, NBFC, cooperative societies etc. NPA (Non-Performing Asset) is a critical factor which has adversely impacted the development and growth of the economy. This research discusses the impact of NPAs on the profits of banks. This research attempts to analyze the impact of few important financial heads on NPAs of banks and to suggest on effective management of NPAs. According to RBI data, five banks (public and private) with highest NPAs were taken for the study for period 2014-2015 to 2018-2019. The research applied correlation analysis to compute the relationship between net profits and NPAs and multiple regression analysis to determine the impact of important financial heads on NPAs.