An Empirical Study of NPAs in Indian Scheduled Commercial Banks

Abstract

This study examines the trends and dynamics of Gross and Net Non-Performing Assets (NPAs) across different groups of Scheduled Commercial Banks in India from 2012-13 to 2023-24. The bank groups analyzed include Public Sector Banks, Old Private Sector Banks, Private Sector Banks, Foreign Banks, and Small Finance Banks. The research identifies periods of peak asset quality stress, followed by recovery phases, highlighting the differential impact among bank categories. Using secondary data from annual bank reports and regulatory returns, the study assesses the evolution of NPAs in both absolute terms and as a percentage of advances. Findings reveal that Public Sector Banks suffered the highest NPA levels, while Private and Foreign Banks maintained comparatively lower NPA ratios. The study suggests that strengthening credit risk management, enhancing regulatory oversight, and adopting technological innovations are critical for sustaining improvements in asset quality. These insights contribute to understanding the challenges and progress in the Indian banking sector’s asset quality management.