• Pooja Pandey

Banks are considered not only the dealers in money but are considered as the most important pillar for the development of any economy. They are the warehouse of the country’s wealth and have the pool of all resources essential for economic development. A progressive and growth oriented banking system is very critical for overall economic development of a country, failing which is considered as turmoil for the economy. In case of developing countries like ours, the commercial banks are considered to be the backbone of the economy. They are a very important root of finance and are credit generators for trade and industry. Credit generation is the backbone for the efficient working of trade and industries. But the failure of same is considered as termite for Indian Banking industry. And Non Performing Asset (NPA) is one of those causes. The assets of the banks which don’t perform are called Non Performing Assets (NPA) or bad debts. When customers are unable to pay either interest or part of principal or both, the loan turns into a bad loan. According to RBI, terms loans on which interest or installment of principal remain overdue for a period of more than 90 days from the end of a particular quarter is called a Non-performing Asset. The problem of NPA is not only adversely affecting banking industry rather whole economy. It is basically the observation of Indian trade and industries. Grant of credit is important for development of industries and trade and simultaneously for the economic development but also carries a risk which is known as credit risk. RBI issued guidelines in 1993 based on the recommendations of Narasimha Committee that reduction of NPA to be treated as ‘National Priority’. The study reviews the impact of NPA and the profitability of banks. The research focuses on the study of different aspects of NPAs and its management in Indian Banking Industry, and also points out different improvement measures in mitigating and controlling bad loans. To achieve the above said objectives secondary sources of data are utilized, data is collected from RBI publications, Annual Report, journals and websites. Secondary data is collected from relevant sections of Provisions of banking Regulations Act, SARFEASE Act, Basel Accords and various recommendations of various committees. The research findings emphasize the need for improvement of Indian Banking system. The analysis revealed drastic dependence of macroeconomic indicators on NPAs. The NPAs can be effectively controlled with good credit risk management, integrating visionary measures in improvement of credit evaluation and monitoring system of the banks.

Non Performing Asset, Commercial Banks, Bad loans, credit risk management

"IMPACT OF NPA’S ON BANKING SYSTEM WITH SPECIAL REFERENCE TO INDIAN COMMERCIAL BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.6, Issue 6, page no.740-746, June 2019, Available :http://www.jetir.org/papers/JETIR1906W96.pdf

"IMPACT OF NPA’S ON BANKING SYSTEM WITH SPECIAL REFERENCE TO INDIAN COMMERCIAL BANKS", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.6, Issue 6, page no. pp740-746, June 2019, Available at : http://www.jetir.org/papers/JETIR1906W96.pdf