MANAGEMENT OF NON-PERFORMING ASSETS IN PUBLIC SECTOR BANKS: EVIDENCE FROM INDIA

This study emphasizes on management of non-performing assets in the perspective of the public sector banks in India under strict asset classification norms, use of latest technological platform based on Core Banking Solution, recovery procedures and other bank specific indicators in the context of stringent regulatory framework of the Reserve Bank of India. Non-performing Asset is an important parameter in the analysis of financial performance of a bank as it results in decreasing margin and higher provisioning requirement for doubtful debts. Various banks from different categories together provide advances to different sectors like agricultural, SSI, priority sector, public sector & others. These advances require pre-sanctioning appraisal and post-disbursement control to contain increasing non-performing assets in the Indian Banking Sector. The reduction of non-performing asset is necessary to improve profitability of banks and comply with the capital adequacy norms as per the Basel Accord. This study traces the movement of the non-performing assets present in public sector banks of India by analyzing the financial performance of the banks with respect to key performance indicators and management of the non-performing assets under the purview of new policy actions and regulatory compliance of the Reserve Bank of India.