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NPA is defined as an advance where payment of interest or repayment of installment of
principal (in case of term loans) or both remains unpaid for a certain period. In India, the
definition of NPAs has changed over time. Today non-performing assets are the subject of major
concerns to the banking sector and the other non-banking financial institutions. A loan or lease
that does not meet the stated principal amount and the interest amount payments is termed as
non-performing assets. NPA can be classified into commercial loans which are overdue for more
than 90 days, and consumer loans which are due for more than 180 days, and rise in NPA is due
to the overdue of the commercial loans, there are a lot of pending cases which are being handled
by the Indian banks and other financial institutions.


To understand the concept of Non-performing assets (NPA).

To study the general reasons for assets to become Non-performing assets.
To identify the Non-performing assets.
To offer suggestions based on findings of the study.

The study has the following scope:

Measures for the banks to avoid future NPAs & to reduce existing NPAs.
Help the government in creating & implementing new strategies to control NPAs.
Help to select appropriate techniques suited to manage the NPAs and develop a time
bound action plan to arrest the growth of NPAs.

There are many studies conducted on the issue of Non-Performing Asset Management in
Indian Banks, following is the review of few literatures about the NPA Practices and
Management conducted for Banks in India.
Narula and Singla (2014) evaluate the non performing assets of Punjab National Bank and its
impact on profitability & to see the relation between total advances, Net Profits, Gross & Net
NPA. The study uses the annual reports of Punjab National Bank for the period of six years from
2006-07 to 2011-12. These papers conclude that there is a positive relation between Net Profits
and NPA of PNB. It is because of the mismanagement on the side of bank.
Arora and Ostwal (2014) conducted study on Unearthing the Epidemic of Non-Performing
Assets: A Study of Public and Private Sector Banks which deals with the concept of Nonperforming assets and analyze the classification of loan assets of public and private sector banks.
It also explores the comparison of loan assets of Public sector and private sector banks. The
study concluded that private sectors improving due to decline in NPAs ratio compare to Public
sector banks due to recovery management done in NPAs and suggest that there is need to check
the NPAs of public sector banks so that Indian banking system becomes efficient.


It includes research design, sampling framework, methods of data collection, framework

of analysis and limitations.

Gathering secondary data from books, periodicals, publications, newspaper, survey
reports, journals, websites, and internal website.