• MELITA JACOB

Non-performing Asset (NPA) plays a critical role in the evaluation of financial performance of banks. NPAs are usually the loans lent that cannot be recovered. NPAs usually impact the profitability of banks adversely. NPAs affect not just the financial institutions but the total financial system and therefore the economy. Demonetization occurred in November 2016 as a measure taken by government to curb corruption and increase repayment of loans by the borrowers. This event brought forth a lot of changes both short term and long term. A selective study has been conducted to understand the impact of demonetization on NPAs and thereby on the profitability of banks. For the purpose of this study, two Indian public sector banks (INDIAN BANK, PNB) and two private sector banks (ICICI, HDFC) have been selected for the period of 2014-15 to 2017-18. Banks measure their growth by considering several measures like the increase in number of branches or volume of deposits and basis of standard of assets, etc. NPAs are known to impact the profitability, liquidity and solvency of the banks adversely. This paper uses financial (profitability) ratios and balance sheet ratios to identify the growth of profits/losses in the periods prior to and after demonetization to evaluate the impact of demonetization on NPAs and thereby its contribution to the growth of profits/losses of selected banks. This study uses secondary data derived from published research papers pertaining to the topic, newspaper articles, annual reports of the selected banks, published reports by the RBI. The scope of the study is limited to analysis of impact of demonetization on NPAs and profitability of selected public sector banks and private sector banks for the periods of 2014-15 to 2017-18.

NPA, non-performing assets, demonetization, profitability, ratios, growth, ICICI, PNB, HDFC, INDIAN bank.

"IMPACT OF DEMONETIZATION ON NPA& PROFITABILITY OF BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 2, page no.684-691, February-2019, Available :http://www.jetir.org/papers/JETIR1902986.pdf

"IMPACT OF DEMONETIZATION ON NPA& PROFITABILITY OF BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 2, page no. pp684-691, February-2019, Available at : http://www.jetir.org/papers/JETIR1902986.pdf