Abstract:
Non-performing assets (NPAs) have been a major cause of concern for Indian commercial banks in the recent past years. Many studies have been reported on the different aspects of NPAs in Indian banking system. However, there is a crucial lack of investigation on the comparative assessment of various types of banks such as Public sector banks, Private sector banks and foreign banks so that the trends of NPAs for each category are identified and the reasons underlying the differences among the levels of the NPAs and their trends could be highlighted and demarcated. The purpose of this study is to investigate all these crucial issues through systematic data collection and statistical testing. The outcome of this study will help in shedding more light on the correlation of NPAs with the profitability and comparative assessment of distinct classes of banks so as to identify the areas of opportunity for targeting of NPAs. Use of statistical tools would help in testing the significance of the various phenomenon associated with the NPAs.
Machine summary:
Garg Department of Business Administration, National Institute of Technology, Kurukshetra, India Received 6 February 2014, Accepted 8 September 2014 ABSTRACT: Non-performing assets (NPAs) have been a major cause of concern for Indian commercial banks in the recentpast years.
The outcome of this study will help in shedding more light on the correlation of NPAs with the profitability and comparative assessment of distinct classes of banks so as to identify the areas of opportunity for targeting of NPAs. Use of statistical tools would help in testing the significance of the various phenomenon associated with the NPAs. Keywords: Non-performing assets, Indian banking, Correlation, Hypothesis testing, ANOVA INTRODUCTION It has been argued by a number of economists that a well developed financial system enables flow of savings and investments and hence, supports economic growth (King and Levine, 1993).
RESEARCH METHOD The objective of this study is to analyse the nature, extent and magnitude of NPAs of Indian SCB’s as distinct groups (such as PSBs, Private sector banks and Foreign Banks) and to assess the possible correlation among the Profitability of the SCBs (as distinct groups) and the NPA levels.
a) H0: There is no significant correlation between profits & NPAs of Public Sector Banks for the period of the study.
4. There is no significant correlation between the Net NPAs and profits for public sector banks and private sector banks during the period of study.
However, there is a significant difference among the net NPAs for public sector banks, private sector banks and foreign banks for the period of study.