Commentary Open Access

Effect of Non-Performing Assets on Banking Sector: A Study on State Bank of India

Abstract

Non-performing asset (NPA) is a critical challenge for the banking sector in India and the world as a whole now-a-days. It is negatively affecting the profitability of the banking industry over the period. The NPA is a drag on the banking sector. Various related studies, researches and banking statistics evidently show that the NPA is increasing more rapidly in the public sector banks than private sector banks in India scenario. It could only meet up by the vital and efficient asset management wings on the banks. Indian is holding 33rds position in respect of the world’s gross NPA ratio (10.3%). This paper has attempted to analyze the effect of NPA on the profitability and the trend of NPA of the State Bank of India over last ten years from 2009-10 to 2018-19. The study reveals that the NPA has a gradual increasing trend, but a sharp decline in year 2018-19. The paper also shows that the NPA has an inverse effect on the profitability of the State bank of India

 Dr. Jyotirmoy Koley