COMPARATIVE ANALYSIS OF NPA OF PUBLIC SECTORE BANK AND

PRAIVATE SECTORE BANK

Sr. Page No.

Topic
No
1
1. EXECUTIVE SUMMARY
2
2 INTRODUCTION TO THE
TOPIC

3. INDUSTRY OVERVIEW 6

4.. COMPANY OVERVIEW 11

17
5. PROJECT DETAILS
21
6. DATA ANALYSIS AND
INTERPRETATION

7. FINDINGS 48

49
8. KEY LEARNINGS (Specific &
General)

9. CONCLUSION 50

10. BIBLIOGRAPHY 51

11. APPROVED PROJECT 52

SYNOPSIS

EXECUTIVE SUMMARY
Banking sectors is exposed to number of risk like market risk, interest rate risk,
liquidity risk, borrower’s risk, and among these many risk the bank face one of the
most critical is the borrowers risk – the risk of nonpayment of the disbursed loans and
advances. As big chunk of deposits fund is invested in the form of loans and advances.
Hence, parameters for evaluating the performance of banks have also changed. This
study provides an empirical approach to the analysis of profitability indicators with a
focal point on non-performing assets (NPAs) of public and private sector banks. NPAs
reflect the performance of banks. The earning capacity and profitability of the banks
are highly affected because of the existence of NPAs .A high level of NPAs suggests
that large number of credit defaults that affect the profitability and net-worth of banks.
Private and public Sector banks are highly affected by this three letter virus NPA. In
this study an effort has been made to evaluate the operational performance of the
selected PSBs & Private bank in India and also analyze how efficiently Public and
Private sector banks can managing NPA.

Non performing assets are one of the major concerns for banks in India. NPAs reveal
the performance of banks. It affects the liquidity and profitability of banks. Growing
non performing assets is a recurrent problem in the Indian banking sector. The NPAs
growth has a direct impact on profitability of banks. It involves the necessity of
provisions, which reduces the overall profits and shareholders‟ value. The problem of
NPAs is not only affecting the banks but also the whole economy. In this article, a
comparative study has been made between NPA of public sector banks and private
sector banks in India for the past 5 years. The factors contributing to NPAs, reasons
for high NPAs and their impact on Indian banking operations, the trend and magnitude
of NPAs in Indian banks. The recovery of NPAs in both public and private sector
banks has been analysed.

The major concern for banks in India is Non-performing assets. Performance of the
banks is reflected through NPA. Larger NPA reflects credit non-payments that affect
the profitability and net worth of banks which erodes the value of the asset. Liquidity
and profitability of the banks is affected by high level of NPAs which additional
affects the quality and survival of banks. Serious problem has been faced by banking
sector of India due to high and large NPAs. Profitability of any bank is directly impact
by NPAs. Profit and shareholders value is reduced because NPAs involve necessary
provision. Whole Indian economy is affected by the problem of NPAs. NPAs are the
reflection of health and trade of Indian banking sector.

INTRODUCATION TO THE TOPIC

The banking industry has undergone a sea change after the first phase Economic
liberalization in 1991 and hence credit management. Asset quality was not prime
concern in Indian banking sector till 1991, but was mainly focused on performance
objectives such as opening wide networks/branches, Development of rural areas,
priority sector lending, higher employment Generation, etc. While the primary
function of banks is to lend funds as loans to various sectors such as agriculture,
industry, personal loans, housing loans etc., But in recent times the banks have become
very cautious in extending loans. The Reason being mounting nonperforming assets
(NPAs) and nowadays these are one of the major concerns for banks in India.
Indian Banking System consists of Commercial Banks (Public and Private Sector
Banks, Foreign Banks), Regional Rural Banks(RRBs), Co-operative Banks, Payment
Banks etc. With the nationalization of 14 banks in 1969 and 6 banks in 1980, the
Indian Economy entered into top ten economies of the world. Non-Performing
Assets(NPAs) or bad loans are thoase assets of any bank which do not perform. If the
borrowers don‟t pay either principal/part of principal orinterest or both, then the loan
turns into a bad loan. NPAs according to RBI are those loans, on which interest or
principal remains overdue for a period of morethan 90 days, from the end of a
particular quarter.
After nationalization, the Indian banking sector has made symbolic development in
three aspects– branch expansion, deposit mobilization and loan maximization but
among the above three management and monitoring of loans took a back seat. The
origination of banking in India took place in the last decade of the 18th century and
private sector and public sector banks are the essential part of banking system in India.
At the present scenario, the Indian banking system is not only employed in their
conventional business of accepting and lending money but have expanded their
activities into advanced fields of operations like merchant banking, leasing, housing
finance, mutual funds and venture capital Banking institutions, now a days are
introducing and offering a great sum of inventive and innovative schemes for
mobilizing. deposits.
In extension, a lot of beneficial services are also being provided by banking
institutions to their customers such as issuing drafts, traveler’s cheques, gift cheques,
accepting valuables for safe custody and modern banking facilities. Banking has
undergone critical changes since the process of liberalization and reform of the
financial sector were set in motion in 1991. The underlying aim to bring reforms and
changes in financial sector is to make the system more combative, able, beneficial and
fruitful. For an economy to flourish, a firm and solid banking sector is very necessary.
There is a lot of injurious impact on other sectors due to the breakdown of banking
sector. Nonperforming asset (NPA), now a days has become one of the leading
concerns for banks in India. Sky high NPAs of banking institution advocate high
possibility of a large number of credit blunders that affect the profitability and net
worth of banks and also corrode the value of the asset.
A Non-performing asset can be elucidated as a credit facility in respect of which the
interest and/or installment of principle has remained „past due‟ for a specific period of
time. It refers to a classification for loans on books of financial institutions that are in
default or are in arrears on scheduled payments of principal or interest.
“An asset should be classified as non-performing, if the interest and/or principle
amount has not been received or remained outstanding for one quarter from the day
such income/ installment have fallen due.”
With a view to moving towards international best practices and to ensure greater
transparency, it has been decided to adopt the „90 days‟ over dues norm for
identification of NPAs from the year ending March 31, 2004. Accordingly, with effect
from March 31,2004; a NPA is a loan or an advance where:
 Interest and/or installment of principle remain overdue for a period of more
than 90 days in respect for a term loan;
 The account remains „out of order‟ in respect of an overdraft or cash credit;
 The bill remains overdue for a period of more than 90 days in the case of bills
purchased and discounted;
 The installment of principle or interest thereon remains overdue for two crop
seasons for short duration crops;
 The installment of principle or interest remains overdue for one crop season for
long duration crops.
Types of Non-Performing Assets Gross NPA:

As per RBI guidelines, Gross NPA are the sum total of all loan assets that are
classified as NPAs as on Balance Sheet date. The nature of the loans made by banks is
reflected by its Gross NPA. It consists of all the nonstandard assets such as
substandard, doubtful and loss assets. It can be calculated with the help of following
ratio

Gross NPA = Gross NPAs / Gross Advances

Net NPA: All those type of NPAs in which the bank has deducted the provision
regarding NPAs are called Net NPA. It can be calculated by following:

Net NPA = Gross NPAs - Provisions / Gross Advances – Provisions

Types of Assets

 Standard Assets: If the borrower routinely pays his dues regularly and on time;
bank considers such loan as its “Standard Asset”. All those assets for which the
bank is receiving interest as well as the principal amount of the loan regularly
from the customer are referred to as Standard Assets. Such assets carry a
normal risk and are not NPA in the real sense. So, no special provisions are
required for Standard Assets.

 Sub-standard Assets: If any loan or advance remains non-performing for a

period of 12 months, it is called as Sub-standard assets.

 Doubtful Assets: With effect from 31 March 2005, if any asset remains NPA
for a period exceeding 12 months, it is to be classified as doubtful.

 Loss Assets: All those assets which cannot be recovered are called as Loss
assets.
What can be the possible reasons for NPAs?

 Diversification of funds to unrelated business/fraud.

 Lapses due to diligence.
 Business losses due to changes in business/regulatory environment.
 Lack of morale, particularly after government schemes which had written off
loans.
 Global, regional or national financial crisis which results in erosion of margins
and profits of companies, therefore, stressing their balance sheet which finally
results into non-servicing of interest and loan payments.(For example, the 2008
global financial crisis).
 The general slowdown of entire economy for example after 2011 there was
slowdown in the Indian economy which resulted in the faster growth of NPAs.
 The slowdown in a specific industrial segment, therefore, companies in that
area bear the heat and some may become NPAs.
 Unplanned expansion of corporate houses during the boom period and loan
 Taken at low rates later being serviced at high rates, therefore, resulting in
NPAs.

What is the impact of NPAs?

 Lenders suffer a lowering of profit margins.

 Stress in banking sector causes less money available to fund other projects,
therefore, negative impact on the larger national economy.
 Higher interest rates by the banks to maintain the profit margin.
 Redirecting funds from the good projects to the bad ones.
 As investments got stuck, it may result in it may result in unemployment.
 In the case of public sector banks, the bad health of banks means a bad return
for a shareholder which means that the government of India gets less money as
a dividend. Therefore it may impact easy deployment of money for social and
infrastructure development and results in social and political cost.
 Investors do not get rightful returns.
  Balance sheet syndrome of Indian characteristics that is both the banks and the
corporate sector have stressed balance sheet and causes halting of the
investment-led development process.
 NPAs related cases add more pressure to already pending cases with the
judiciary.

What are the various steps taken to tackle NPAs?

NPAs story is not new in India and there have been several steps taken by the GOI on
legal, financial, policy level reforms. In the year 1991, Narsimham committee
recommended many reforms to tackle NPAs. Some of them were implemented.

The Debt Recovery Tribunals (DRTs) – 1993

To decrease the time required for settling cases. They are governed by the provisions
of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993. However,
their number is not sufficient therefore they also suffer from time lag and cases are
pending for more than 2-3 years in many areas.

Credit Information Bureau – 2000

A good information system is required to prevent loan falling into bad hands and
therefore prevention of NPAs. It helps banks by maintaining and sharing data of
individual defaulters and willful defaulters.

LokAdalats – 2001

They are helpful in tackling and recovery of small loans however they are limited up
to 5 lakh rupees loans only by the RBI guidelines issued in 2001. They are positive in
the sense that they avoid more cases into the legal system.

Compromise Settlement – 2001

It provides a simple mechanism for recovery of NPA for the advances below Rs. 10
Crores. It covers lawsuits with courts and DRTs (Debt Recovery Tribunals) however
willful default and fraud cases are excluded.

SARFAESI Act – 2002

The Securitization and Reconstruction of Financial Assets and Enforcement of

Security Interest (SARFAESI) Act, 2002 – The Act permits Banks / Financial
Institutions to recover their NPAs without the involvement of the Court, through
acquiring and disposing of the secured assets in NPA accounts with an outstanding
amount of Rs. 1 lakh and above. The banks have to first issue a notice. Then, on the
borrower‟s failure to repay, they can:

1. Take ownership of security and/or

2. Control over the management of the borrowing concern.
3. Appoint a person to manage the concern.

Further, this act has been amended last year to make its enforcement faster.

ARC (Asset Reconstruction Companies)

The RBI gave license to 14 new ARCs recently after the amendment of the
SARFAESI Act of 2002. These companies are created to unlock value from stressed
loans. Before this law came, lenders could enforce their security interests only through
courts, which was a time-consuming process.

Corporate Debt Restructuring – 2005

It is for reducing the burden of the debts on the company by decreasing the rates
paid and increasing the time the company has to pay the obligation back.

Strategic debt restructuring (SDR) – 2015

Under this scheme banks who have given loans to a corporate borrower gets the right
to convert the complete or part of their loans into equity shares in the loan 9 taken
company. Its basic purpose is to ensure that more stake of promoters in reviving
stressed accounts and providing banks with enhanced capabilities for initiating a
change of ownership in appropriate cases.

Asset Quality Review – 2015

Classify stressed assets and provisioning for them so as the secure the future of the
banks and further early identification of the assets and prevent them from becoming
stressed by appropriate action.

Sustainable structuring of stressed assets (S4A) – 2016

It has been formulated as an optional framework for the resolution of largely stressed
accounts. It involves the determination of sustainable debt level for a stressed
borrower and bifurcation of the outstanding debt into sustainable debt and
equity/quasi-equity instruments which are expected to provide upside to the lenders
when the borrower turns around.

Insolvency and Bankruptcy code Act-2016

It has been formulated to tackle the Chakravyuaha Challenge (Economic Survey) of

the exit problem in India. The aim of this law is to promote entrepreneurship,
availability of credit, and balance the interests of all stakeholders by consolidating and
amending the laws relating to reorganization and insolvency resolution of corporate
persons, partnership firms and individuals in a time-bound manner and for
maximization of value of assets of such persons and matters connected therewith or
incidental thereto.

Pubic ARC vs. Private ARC – 2017

This debate is recently in the news which is about the idea of a Public Asset
Reconstruction Companies (ARC) fully funded and administered by the government
as mooted by this year‟s Economic Survey Vs. the private ARC as advocated by the
deputy governor of RBI Mr. Viral Acharya. Economic survey calls it as PARA (Public
Asset Rehabilitation Agency) and the recommendation is based on a similar agency
being used during the East Asian crisis of 1997 which was a success.

Bad Banks – 2017

Economic survey 16-17, also talks about the formation of a bad bank which will take
all the stressed loans and it will tackle it according to flexible rules and mechanism. It
will ease the balance sheet of PSBs giving them the space to fund new projects and
continue the funding of development projects.

List of Public Sector bank in India

List of Private Sector bank in India
INDUSTRY OVERVIEW

The banking system in India is significantly different from that of other Asian nations
because of the country’s unique geographic, social, and economic characteristics. India
has a large population and land size, a diverse culture, and extreme disparities in
income, which are marked among its regions. There are high levels of illiteracy among
a large percentage of its population but, at the same time, the country has a large
reservoir of managerial and technologically advanced talents. Between about 30 and
35 percent of the population resides in metro and urban cities and the rest is spread in
several semi-urban and rural centers. The country’s economic policy framework
combines socialistic and capitalistic features with a heavy bias towards public sector
investment. India has followed the path of growth-led exports rather than the
“exportled growth” of other Asian economies, with emphasis on self-reliance through
import substitution.
These features are reflected in the structure, size, and diversity of the country’s
banking and financial sector. The banking system has had to serve the goals of
economic policies enunciated in successive five year development plans, particularly
concerning equitable income distribution, balanced regional economic growth, and the
reduction and elimination of private sector monopolies in trade and industry. In order
for the banking industry to serve as an instrument of state policy, it was subjected to
various nationalization schemes in different phases (1955, 1969, and 1980). As a
result, banking remained internationally isolated (few Indian banks had presence
abroad in international financial centers) because of preoccupations with domestic
priorities, especially massive branch expansion and attracting more people to the
system. Moreover, the sector has been assigned the role of providing support to other
economic sectors such as agriculture, small-scale industries, exports, and banking
activities in the developed commercial centers (i.e., metro, urban, and a limited
number of semi-urban centers). The banking system’s international isolation was also
due to strict branch licensing controls on foreign banks already operating in the
country as well as entry restrictions facing new foreign banks. A criterion of
reciprocity is required for any Indian bank to open an office abroad. These features
have left the Indian banking sector with weaknesses and strengths. A big challenge
facing Indian banks is how, under the current ownership structure, to attain operational
efficiency suitable for modern financial intermediation. On the other hand, it has been
relatively easy for the public sector banks to recapitalize, given the increases in
nonperforming assets (NPAs), as their Government dominated ownership structure has
reduced the conflicts of interest that private banks would face.

2. HISTORICAL
BACKGROUND
Bank of Hindustan was set up in
1870; it was the earliest Indian
Bank. Later, three presidency
banks under Presidency Bank's
act 1876 i.e. Bank of Calcutta,
Bank of Bombay and Bank of
Madras were set up, which laid
foundation for modern banking in
India. In 1921, all presidency
banks were amalgamated to form
the Imperial Bank of India.
Imperial bank carried out limited
number of central banking
functions prior to establishment
of RBI. It engaged in all types
of
commercial banking business except
dealing in foreign exchange.
Reserve Bank of India Act was
passed in 1934 & Reserve Bank of
India (RBI) was constituted as
an apex body without major
government ownership. Banking
Regulations Act was passed in
1949. This regulation brought RBI
under government control. Under
the act, RBI got wide ranging
powers for supervision & control of
banks. The Act also vested licensing
powers & the authority to
conduct inspections in RBI.
In 1955, RBI acquired control of the
Imperial Bank of India, which was
renamed as State Bank of
India. In 1959, SBI took over
control of eight private banks
floated in the erstwhile princely
states,
making them as its 100%
subsidiaries.
It was 1960, when RBI was
empowered to force compulsory
merger of weak banks with the
strong ones. It significantly reduced
the total number of banks from 566
in 1951 to 85 in 1969. In
July 1969, government nationalised
14 banks having deposits of Rs. 50
crores & above. In 1980,
government acquired 6 more banks
with deposits of more than Rs.200
crores. Nationalisation of
banks was to make them play the
role of catalytic agents for
economic growth. The Narasimha
Committee report suggested wide
ranging reforms for the banking
sector in 1992 to introduce
internationally accepted banking
practices. The amendment of
Banking Regulation Act in 1993
saw the entry of new private sector
banks.
Banking industry is the back
bone for growth of any economy.
The journey of Indian Banking
Industry has faced many waves of
economic crisis. Recently, we have
seen the economic crisis
of US in 2008-09 and now the
European crisis. The general
scenario of the world economy is
very critical.
It is the banking rules and
regulation framework of India
which has prevented it from the
world
economic crisis. In order to
understand the challenges and
opportunities of Indian Banking
Industry, first of all, we need to
understand the general scenario and
structure of Indian Banking
Industry.
HISTORICAL BACKGROUND OF BANKING SYSTEM IN INDIA.
Bank of Hindustan was set up in 1870; it was the earliest Indian Bank. Later, three
presidency banks under Presidency Bank's act 1876 i.e. Bank of Calcutta, Bank of
Bombay and Bank of Madras were set up, which laid foundation for modern banking
in India. In 1921, all presidency banks were amalgamated to form the Imperial Bank
of India. Imperial bank carried out limited number of central banking functions prior
to establishment of RBI. It engaged in all types of commercial banking business
except dealing in foreign exchange.
Reserve Bank of India Act was passed in 1934 & Reserve Bank of India (RBI) was
constituted as an apex body without major government ownership. Banking
Regulations Act was passed in 1949. This regulation brought RBI under government
control. Under the act, RBI got wide ranging powers for supervision & control of
banks. The Act also vested licensing powers & the authority to conduct inspections in
RBI.
In 1955, RBI acquired control of the Imperial Bank of India, which was renamed as
State Bank of India. In 1959, SBI took over control of eight private banks floated in
the erstwhile princely states, making them as its 100% subsidiaries.
It was 1960, when RBI was empowered to force compulsory merger of weak banks
with the strong ones. It significantly reduced the total number of banks from 566 in
1951 to 85 in 1969. In July 1969, government nationalised 14 banks having deposits of
Rs. 50 crores & above. In 1980, government acquired 6 more banks with deposits of
more than Rs.200 crores. Nationalisation of banks was to make them play the role of
catalytic agents for economic growth.
The Narasimha Committee report suggested wide ranging reforms for the banking
sector in 1992 to introduce internationally accepted banking practices. The amendment
of Banking Regulation Act in 1993 saw the entry of new private sector banks.
Banking industry is the back bone for growth of any economy. The journey of Indian
Banking Industry has faced many waves of economic crisis. Recently, we have seen
the economic crisis of US in 2008-09 and now the European crisis. The general
scenario of the world economy is very critical. It is the banking rules and regulation
framework of India which has prevented it from the world economic crisis

STRUCTURE OF INDIAN BANKING INDUSTRY

Banking Industry in India functions under the sunshade of Reserve Bank of India - the
regulatory, central bank. Banking Industry mainly consists of:
 • Commercial Banks
• Co-operative Banks
The commercial banking structure in India consists of: Scheduled Commercial Banks
Unscheduled Bank. Scheduled commercial Banks constitute those banks which have
been included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI
in turn includes only those banks in this schedule which satisfy the criteria laid down
vide section 42 (60) of the Act. Some co-operative banks are scheduled commercial
banks although not all co-operative banks are. Being a part of the second schedule
confers some benefits to the bank in terms of access to accommodation by RBI during
the times of liquidity constraints. At the same time, however, this status also subjects
the bank certain conditions and obligation towards the reserve regulations of RBI. For
the purpose of assessment of performance of banks, the Reserve Bank of India
categorise them as public sector banks, old private sector banks, new private sector
banks and foreign banks.

Scheduled Commercial Banks Operating In India

Sr. Nationalized Old Private New Private Foreign
no Banks sector banks sector banks Banks
1 Allahabad Catholic Syrian Axis Bank Ltd. Abu Dhabi
Bank Ltd. Bank Ltd. Commercial
Bank

2 Andhra Bank City Union Bank Ltd Development American

Ltd. Credit Bank Ltd. Express Bank
3 Bank of Baroda Dhanalakshmi Bank HDFC Bank Ltd. Bank
Ltd. Ltd. International
Indonesia

4 Bank of India Federal Bank Ltd ICICI Bank Ltd Bank of

Ltd. America
5 Bank of ING Vysya Bank Ltd. IndusInd Bank Bank of Ceylon
Maharashtra Ltd.

6 Canara Bank Jammu and Kotak Mahindra Bank of Nova

Ltd. Kashmir Bank Ltd. Bank Ltd. Scotia (Scotia
Bank)
7 Central Bank of Karnataka Bank Ltd Yes Bank Ltd Bank of Tokyo
India Ltd. Mitsubishi UFJ

8 Corporation Karur Vysya Bank Barclays Bank

Bank Ltd. Ltd PLC
9 Dena Bank Ltd Lakshmi Vilas Bank BNP Paribas
Ltd.

10 IDBI Bank Ltd Nainital Bank Ltd Calyon Bank

11 Indian Bank Ratnakar Bank Ltd. Chinatrust

Ltd Commercial
Bank

12 Indian SBI Commercial and Citibank N.A

Overseas Bank International Bank
Ltd Ltd.
13 Oriental Bank South Indian Bank DBS Bank
of Commerce Ltd.
Ltd.

14 Punjab and Tamilnad Deutsche Bank

Sind Bank Ltd. Mercantile Bank AG
Ltd.

15 Punjab HSBC
National Bank
Ltd.
16 Syndicate Bank Mizuho
Ltd. Corporate Bank

17 UCO Bank Ltd Royal Bank of

Scotland
18 Union Bank of JPMorgan
India Ltd. Chase Bank

19 United Bank of Krung Thai

India Ltd. Bank
20 Vijaya Bank Ltd. Mashreq Bank
psc

21 State Bank of Shinhan Bank

Bikaner and
Jaipur Ltd.

22 State Bank of Société

Hyderabad Ltd. Générale
23 State Bank of Sonali Bank
India Ltd.

24 State Bank of Standard

Mysore Ltd. Chartered Bank
25 State Bank of State Bank of
Patiyala Ltd. Mauritius

26 State Bank of UBS

Travankore
27 VTB

GENERAL BANKING SCENARIO IN INDIA

The general banking scenario in India has become very dynamic now-a-days. Before
preliberalization era, the picture of Indian Banking was completely different as the
Government of India initiated measures to play an active role in the economic life of
the nation, and the Industrial Policy Resolution adopted by the government in 1948
envisaged a mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance.
The Reserve Bank of India was nationalized on January 1, 1949 under the terms of the
Reserve Bank of India (Transfer to Public Ownership) Act, 1948. In 1949, the
Banking Regulation Act was enacted which empowered the Reserve Bank of India
(RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation
 Act also provided that no new bank or branch of an existing bank could be opened
without a license from the RBI, and no two banks could have common directors.
By the 1960s, the Indian banking industry had become an important tool to facilitate
the speed of development of the Indian economy. The Government of India issued an
ordinance and nationalized the 14 largest commercial banks with effect from the
midnight of July 19, 1969. A second dose of nationalization of 6 more commercial
banks followed in 1980. The stated reason for the nationalization was to give the
government more control of credit delivery. With the second dose of nationalization,
the Government of India controlled around 91% of the banking business of India.
Later on, in the year 1993, the government merged New Bank of India with Punjab
National Bank. It was the only merger between nationalized banks and resulted in the
reduction of the number of nationalized banks from 20 to 19. After this, until the
1990s, the nationalized banks grew at a pace of around 4%, closer to the average
growth rate of the Indian economy. In the early 1990s, the then Narasimha Rao
government embarked on a policy of liberalization, licensing a small number of
private banks. The next stage for the Indian banking has been set up with the proposed
relaxation in the norms for Foreign Direct Investment, where all Foreign Investors in
banks may be given voting rights which could exceed the present cap of 10%, at
present it has gone up to 74% with some restrictions. The new policy shook the
Banking sector in India completely. Bankers, till this time, were used to the 4-6-4
method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave
ushered in a modern outlook and tech-savvy methods of working for traditional banks.
All this led to the retail boom in India. People not just demanded more from their
banks but also received more.

MARKET SIZE
The Indian banking system consists of 12 public sector banks, 22 private sector banks, 46
foreign banks, 56 regional rural banks, 1485 urban cooperative banks and 96,000 rural
cooperative banks in addition to cooperative credit institutions As of September 2021, the
total number of ATMs in India reached 213,145 out of which 47.5% are in rural and semi
urban areas.

In 2020-2022, bank assets across sectors increased. Total assets across the banking sector
(including public and private sector banks) increased to US$ 2.67 trillion in 2022.

In 2022, total assets in the public and private banking sectors were US$ 1,594.51 billion
and US$ 925.05 billion, respectively.

During FY16-FY22, bank credit increased at a CAGR of 0.62%. As of FY22, total credit
extended surged to US$ 1,532.31 billion. During FY16-FY22, deposits grew at a CAGR of
10.92% and reached US$ 2.12 trillion by FY22. Bank deposits stood at Rs. 173.70 trillion
(US$ 2.12 trillion) as of November 4, 2022.

According to India Ratings & Research (Ind-Ra), credit growth is expected to hit 10% in
2022-23 which will be a double digit growth in eight years. As of November 4, 2022 bank
credit stood at Rs. 129.26 lakh crore (US$ 1,585.09 billion).

As of November 4, 2022 credit to non-food industries stood at Rs. 128.87 lakh crore (US$
1.58 trillion).

BANKING INDIA
CHALLENGES FACED BY INDIAN BANKING INDUSTRY

Asset quality:
The biggest risk to India's banks is the rise in bad loans. The slowdown in the economy in
the last few years led to a rise in bad loans or non-performing assets (NPAs). These are
loans which are not repaid back by the borrower. They are, thus, a loss for the bank. Net
NPAs amount to only 2.36% of the total loans in the banking system. This may not seem
like an alarming figure. However, it does not take into restructured assets - when a
borrower is unable to pay back and the bank makes the loan more flexible to be paid back
over a longer period of time. Restructured assets too put pressure on a bank's profitability.
Together, such stressed assets account for 10.9% of the total loans in the system. And these
are just loans which are identified as stressed assets. 36.9% of the total debt in India is at
risk, according to an IMF report. Yet, banks have capacity to absorb only 7.9% loss. So, if
these debts turn bad too, banks will face major losses.

Capital adequacy:
One way a bank tries to ensure it is protected from bad loans is by setting aside money as a
'provision'. This money cannot be used for any other purposes including lending. As a
result, banks have lower capital available to use for its various operations. The Capital
Adequacy Ratio measures how much capital a bank has. When this falls, the bank has to
borrow money or use depositors' money to lend. This money, however, is riskier and
costlier than the bank's own capital. For example, a depositor can withdraw his/her money
any time they want. So, a fall in CAR (often called as CRAR or Capital to Risk Assets
Ratio) is worrisome. In the last few years, CRAR has declined steadily for Indian banks,
especially for public-sector banks. Moreover, banks are not able to raise money easily,
especially public-sector banks which have higher number of bad loans. If banks do not
shore up their capital soon, some could fail to meet the minimum capital requirement set by
the RBI. In such a case, they could face severe issues.

Unhedged forex exposure:

"The wild gyrations in the forex market have the potential to inflict significant stress in the
books of Indian companies who have heavily borrowed abroad," Mundra said in his speech.
This stress can affect their ability to pay back debt to Indian banks. As a result, the RBI
wants banks to ensure companies they lend to do not expose themselves to unnecessary
debt in dollars.

Employee and technology:

Public-sector banks are seeing more employees retire these days. So, younger employees
are replacing the elder, more-experienced employees. This, however, happens at junior
levels. As a result, there would be a virtual vacuum at the middle and senior level. "The
absence of middle management could lead to adverse impact on banks' decision making
process as this segment of officers played a critical role in translating the top management's
strategy into workable action plans," the deputy governor said. Moreover, banks -
especially government-owned banks - need to embrace technology to offer better products.
This will also help make banks more efficient.

Balance Sheet management:

In the past few years, many banks have tried to delay setting aside money as provisions (for
future bad loans). One reason for this is that a bank's chief executives have a short tenure,
during which time they want to post higher net profits and cheer investors. "It must be
appreciated that CEOs/ CMDs would come and go but the institutions are perpetual
entities. The only thing which can perpetuate their existence is a stronger and healthier
balance sheet," Mundra said. Deferring provisioning is harmful in the long term. It reduces
the bank's ability to withstand financial pressures. This is even more problematic
considering the poor capital adequacy in Indian banks.

GOVERNMENT INITIATIVES TO OVERCOME CHALLENGES

 National Asset reconstruction company (NARCL) will take over, 15 non-

performing loans (NPLs) worth Rs. 50,000 crores (US$ 6.70 billion) from the
banks.
 National payments corporation India (NPCI) has plans to launch UPI lite this will
provide offline UPI services for digital payments. Payments of upto Rs. 200 (US$
2.67) can be made using this.
 In the Union budget of 2022-23 India has announced plans for a central bank digital
currency (CBDC) which will be possibly know as Digital Rupee.
  National Asset reconstruction company (NARCL) will take over, 15 Non
performing loans (NPLs) worth Rs. 50,000 crores (US$ 6.70 billion) from the
banks.
 In November 2021, RBI launched the ‘RBI Retail Direct Scheme’ for retail
investors to increase retail participation in government securities.
 The RBI introduced new auto debit rules with a mandatory additional factor of
authentication (AFA), effective from October 01, 2021, to improve the safety and
security of card transactions, as part of its risk mitigation measures.
 In September 2021, Central Banks of India and Singapore announced to link their
digital payment systems by July 2022 to initiate instant and low-cost fund transfers.
 In August 2021, Prime Minister Mr. Narendra Modi launched e-RUPI, a person and
purpose-specific digital payment solution. e-RUPI is a QR code or SMS string-
based e-voucher that is sent to the beneficiary’s cell phone. Users of this one-time
payment mechanism will be able to redeem the voucher at the service provider
without the usage of a card, digital payments app, or internet banking access.
 As per Union Budget 2021-22, the government will disinvest IDBI Bank and
privatise two public sector banks.
 Government smoothly carried out consolidation, reducing the number of Public
Sector Banks by eight.
 In May 2022, Unified Payments Interface (UPI) recorded 5.95 billion transactions
worth Rs. 10.41 trillion (US$ 133.46 billion).
 According to the RBI, India’s foreign exchange reserves reached US$ 630.19
billion as of February 18, 2022.
 The number of transactions through immediate payment service (IMPS) reached
430.67 million and amounted to Rs. 3.70 trillion (US$ 49.75 billion) in October
2021.

KEY INVESTMENTS AND DEVELOPMENTS IN INDIA’S BANKING INDUSTRY

 On June, 2022, the number of bank accounts—opened under the government’s

flagship financial inclusion drive ‘Pradhan Mantri Jan Dhan Yojana (PMJDY)’—
reached 45.60 crore and deposits in the Jan Dhan bank accounts totaled Rs. 1.68
trillion (US$ 21.56 billion).
 In April 2022, India’s largest private bank HDFC Bank announced a
transformational merger with HDFC Limited.
 On November 09, 2021, RBI announced the launch of its first global hackathon
'HARBINGER 2021 – Innovation for Transformation' with the theme ‘Smarter
Digital Payments’.
 In November 2021, Kotak Mahindra Bank announced that it has completed the
acquisition of a 9.98% stake in KFin Technologies for Rs. 310 crore (US$ 41.62
million).
 In July 2021, Google Pay for Business has enabled small merchants to access credit
through tie-up with the digital lending platform for MSMEs—FlexiLoans.
 In December 2020, in response to the RBI’s cautionary message, the Digital
Lenders’ Association issued a revised code of conduct for digital lending.
 On November 6, 2020, WhatsApp started UPI payments service in India on
receiving the National Payments Corporation of India (NPCI) approval to ‘Go Live’
on UPI in a graded manner.
 In October 2020, HDFC Bank and Apollo Hospitals partnered to launch the
‘Healthy Life Programme’, a holistic healthcare solution that makes healthy living
accessible and affordable on Apollo’s digital platform.
 In 2019, banking and financial services witnessed 32 M&A (merger and
acquisition) activities worth US$ 1.72 billion.
 In March 2020, State Bank of India (SBI), India’s largest lender, raised US$ 100
million in green bonds through private placement.
 In February 2020, the Cabinet Committee on Economic Affairs gave its approval
for continuation of the process of recapitalization of Regional Rural Banks (RRBs)
by providing minimum regulatory capital to RRBs for another year beyond 2019-20
- till 2020-21 to those RRBs which are unable to maintain minimum Capital to Risk
weighted Assets Ratio (CRAR) of 9% as per the regulatory norms prescribed by
RBI.
 PROJECT DETAILS

Research topic:
Comparative study on NPA of public sector bank and private sector bank

Significance of study

This study is very useful to the banks to know their non performing assets as
compared to other banks. Today all the banks are facing the problem of non
performing assets. This analysis of non performing assets is very useful to know their
non performing assets and causes of non performing assets. The main source of
income of any bank is the interest on loan. if any borrowers is not paying any interest
amount and principle amount then it creates non performing assets. Non performing
assets are directly affecting to the income and profitability.

Research problem

The main source of income of bank is interest on loan. The performance of any bank is
dependent on the income or profitability. But today the major problem in any bank is
non performing assets. So non performing assets is affecting to the performance of
bank because profitability is dependent on the interest on loan , and if bank is not able
to recover interest amount and principal amount then it creates non performing assets.
Profitability is directly depended on non performing assets. This research study is
based on analysis of non performing assets in public sector bank and private sector
bank.

Objective

 To compare non performing assets in public sector bank and private sector
bank.

 To analyze and compare gross non performing assets in public sector bank and
private sector bank.
  To analyze and compare net non performing assets in public sector bank and
private sector bank.

 To analyze relationship between profit and non performing assets in public

sector bank and private sector bank.

Limitation of study

 Since mystudy is based upon Secondary data, the practical operations as

related to NPAs are adopted by the banks are not learned.

 NPAs are changing with the time. The study is done in the present environment
without foreseeing future developments.

 The study is based on secondary data as published in various publications of

RBI and other reports. These data are based on historical accounting concept,
which ignores the impact of inflation.

 The study, as limitations, is confined only to the selected and restricted

indicators and the study is confined only for the period of five years

Research Design : Descriptive research design.

Sources of data
In this study I used secondary sources of data to analyze and compare non performing
assets in public sector bank and private sector bank.
Population of study
In this study population includes the all public sector and private sector banks in India.
Sample unit & size
In this study I used total 5 years financial data from 2015-16 to 2019-20 of public
sector bank and private sector bank.

DATA ANALYSIS & INTERPRETATION

To analyse the data, first of all we need to study about what data analysis and
interpretation Is. It is the process by which sense and meaning are made of the data
gathered in qualitative research, and by which the emergent knowledge is applied to
clients' problems. This data often takes the form of records of group discussions and
interviews, but is not limited to this. Through processes of revisiting and immersion in
the data, and through complex activities of structuring, re-framing or otherwise
exploring it, the researcher looks for patterns and insights relevant to the key research
issues and uses these to address the client's brief.

COMPARATIVE RATIOS

1. Gross NPA’s Ratio (%) –

Gross NPA (GNPA) denotes the total of all the loan assets that haven't been
repaid by the borrowers within the ninety-day period. 

Gross NPA Ratio = Gross NPA‟s / Gross Advances *100

Table: Private Sector Banks

Table: Public Sector Banks

 Table: GROSS NPA TO GROSS ADVANCES RATIO

Figure: GROSS NPA TO GROSS ADVANCES RATIO

Interpretation:

This analysis indicates the Gross NPA Ratio of Public Sector Banks and Private Sector
Banks from 2015 till 2020. As we know very well that higher this ratio, more
dangerous position it is for the banks.
From the above chart we can clearly understand that rate of growth of Gross NPA of
Public Sector Banks is increasing since 2015 to 2018 which is 5% to 14.6% and in
Private Sector Banks also it is gradually increasing since 2015 from 2.1% to 5.45% in
2020.
But we can say that Gross NPA ratio of Public Sector Banks is decreases in last two
years from 14.6% to 11.6% and 10.25% in 2019 and 2020. whereas in Private Sector
Banks it rises from 4.7% to 5.45% only from year 2018 to 2020.

2. Net NPA Ratio (%) –

Net NPA (NNPA) is the amount remaining after deducting doubtful and unpaid
debts from the GNPA. It is the actual loss suffered by the bank.

Net NPA Ratio = Net NPA‟s/ Net Advances*100

Table: Private Sector Banks

Table: Public Sector Banks

 Table: NET NPA TO NET ADVANCES RATIO

Figure: NET NPA TO NET ADVANCES RATIO

Interpretation:

This analysis indicates the Net NPA Ratio of Public Sector Banks and Private Sector
Banks from 2014 till 2019. As we know very well that higher this ratio, more
dangerous position it is for the banks. From the above chart we can clearly understand
that rate of growth of Net NPA of Public and Private Sector Banks is increasing since
2014 to 2018 which is 2.6% to 8% and 0.7% to 2.4% respectively.
But in the year 2019 ratio is decreases in public and private sector banks from 8% to
4.8% and 2.4% to 2% respectively. very alarming which has increased by 2.2%
whereas in Private Sector Banks it rises by 1.3% only from year 2014 to 2019.
But we can say that increase in Net NPA Ratio of Public Sector Banks is very
alarming which has increased by 2.2% whereas in Private Sector Banks it rises by
1.3% only from year 2014 to 2019.
3 .Provisions Ratio (%) –
Provision coverage ratio (PCR), on the other hand, refers to the percentage of
funds created against NPAs. A higher PCR ratio reflects that the bank has
sufficient capital to withstand asset quality pressures and will not need
significant incremental capital in case of extreme stress.

Provision Ratio = Provisions/ Gross NPA‟s *100

Table: Private Sector Banks

Table: Public Sector Banks

 Table: PROVISION RATIO

FIGURE: PROVISION RATIO

Interpretation:
This analysis indicates the relationship between gross NPA ratio and net NPA ratio.
These both are showing increasing trend from 2015 to 2018 in Private 0 1 2 3 4 5 6
2014-15 2015-16 2016-17 2017-18 2018-19 Private sector bank gross npa ratio net
npa ratio 24 Sector Banks.
But in 2019 net npa ratio is decreased by 0.4 but gross npa ratio is still increased.
Above chart shows that gross NPA‟s are more as compared to net NPA, which means
more provisions are made by private sector banks so as to reduce the risk of non
recovery.
Comparison of Gross NPA Ratio and Net NPA of Public Sector Bank

Table: Comparison of Gross NPA Ratio and Net NPA of Public Sector Bank

Figure: Comparison of Gross NPA Ratio and Net NPA of Public Sector Bank
Interpretation:
This analysis indicates the relationship between gross NPA ratio and net NPA ratio.
These both are showing increasing trend from 2015 to 2018 in Public Sector Banks but
is declines in last year by 80% and 60% respectively. 0 2 4 6 8 10 12 14 16 2014-15
2015-16 2016-17 2017-18 2018-19 Public sector bank gross npa ratio net npa ratio 23
Above chart shows that gross NPA‟s are more as compared to net NPA, which means
more provisions are made by public sector banks so as to reduce the risk of non-
recovery.

Comparison of Gross NPA Ratio and Net NPA of Private Sector Bank

Table: Comparison of Gross NPA Ratio and Net NPA of Private Sector Bank
 Figure: Comparison of Gross NPA Ratio and Net NPA of Private Sector
Interpretation:

This analysis indicates the relationship between gross NPA ratio and net NPA ratio.
These both are showing increasing trend from 2015 to 2018 in Private 0 1 2 3 4 5 6
2014-15 2015-16 2016-17 2017-18 2018-19 Private sector bank gross npa ratio net
npa ratio 24 Sector Banks. But in 2019 net npa ratio is decreased by 0.4 but gross npa
ratio is still increased. Above chart shows that gross NPA‟s are more as compared to
net NPA, which means more provisions are made by private sector banks so as to
reduce the risk of non recovery.
COMPOSITION OF LOAN ASSET OF BANKS
Any loan payment is a combination of principal and interest. As a loan is amortized
by equal regular payments, later payments are comprised of more principal but less
interest than earlier payments.

Table: Private Sector Banks

Table: Public Sector Banks

1. Standard Assets Ratio (%) –

An asset which does not have more than normal risk attached to the business,
and the one which does not disclose any problems is known as a standard asset.

Standard Assets Ratio = Total Standard assets / Gross NPAs

 Table: standard asset ratio of public sector bank and private sector bank

Figure:standard asset ratio of public sector bank and private sector bank

Interpretation:
This analysis indicates the Standard Asset Ratio of Public Sector Banks and Private
Sector Banks from 2015 till 2020. As we know very well that higher this ratio, more
advantageous it is for the banks. From the above chart we can clearly understand that
the Standard Asset Ratio of Public and Private Sector Banks is decreasing constantly
from 2015 to 2020 & has fallen down to 17.34% from 46.18% for Private Sector Bank
& to 8.75% from 19.17% for Public Sector Bank. So, overall we can determine that
Private Sector bank is in beneficial position than Public Sector Bank.
2. Sub-standard Assets Ratio (%)
Assets which has remained NPA for a period less than or equal to 12 months.

Substandard Assets Ratio = Total sub–standard assets / Gross NPAs

Table: substandard asset ratio of public sector bank and private sector bank

Figure: substandard asset ratio of public sector bank and private sector bank
Interpretation:
This analysis indicates the Sub-Standard Asset Ratio of Public Sector Banks and
Private Sector Banks from 2015 till 2020. As we know very well that lower this ratio,
more advantageous it is for the banks. From the above chart we can clearly understand
that the Sub-Standard Asset Ratio of Public and Private Sector Banks is decreasing
constantly from 2015 to 2020 & has fallen down to 0.29% from 0.32% for Private
Sector Bank & to 0.20% from 0.38% for Public Sector Bank. 0 0.05 0.1 0.15 0.2 0.25
0.3 0.35 0.4 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 Sub standard asset
ratio public sector bank private sector bank 28 So, we can determine that Public Sector
bank is in beneficial position than Private Sector Bank
3. Doubtful Assets Ratio (%)
A doubtful asset is an asset that has been nonperforming for more than 12 months.
Loss assets are loans with losses identified by the bank, auditor, or inspector that
need to be fully written off.
Doubtful Assets Ratio = Total doubtful assets / Gross NPAs

Table: Doubtful asset ratio of public sector bank and private sector bank

Figure: Doubtful asset ratio of public sector bank and private sector bank
Interpretation:
This analysis indicates the Doubtful Asset Ratio of Public Sector Banks and Private
Sector Banks from 2015 till 2020. As we know very well that lesser this ratio, more
advantageous it is for the banks. From the above chart we can clearly understand that
the Doubtful Asset Ratio of Public Sector Banks is increasing slightly and Private
Sector Banks is showing constant trend from 2015 to 2019. Since the ratio for both the
banks 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 2014-15 2015-16 2016-17 2017-18 2018-19
2019-20 Doubtful asset ratio public sector bank private sector bank 29 have a marginal
difference, therefore the only thing which differentiates the banks is that this ratio for
public and Private it is decreasing in 2020. So, Private Sector Banks gain advantage
from this ratio.
4. Loss Assets Ratio (%)
When the amount has not been written off wholly but loss has been identified by
the RBI, or external auditor, or internally by the bank, then this asset is classified
as a loss asset.
Loss Assets Ratio = Total loss assets / Gross NPA

Table: Loss asset ratio of public sector bank and private sector bank

Figure: Loss asset ratio of public sector bank and private sector bank
Interpretation:
This analysis indicates the Loss Asset Ratio of Public Sector Banks and Private Sector
Banks from 2015 till 2020. As we know very well that lower this ratio, more
advantageous it is for the banks. 0 0.05 0.1 0.15 0.2 2014-15 2015-16 2016-17 2017-
18 2018-19 2019-20 Loss asset ratio public sector bank private sector bank 30 From
the above chart we can clearly understand that the Loss Asset Ratio of Private Sector
Banks is decreasing constantly from 2015 to 2019 & has fallen down to 0.04% from
0.15% for Private Sector Bank but it increased in 2020 by 0.13. Public Sector Banks is
increasing
constantly from 2015 to 2020 & has rice up to 0.17% from 0.04%.
IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY
The most basic impacts of NPAs on the banks of India are as follows:

 The increase in NPAs reduces the profitability of the banks due to their lack of
credibility. This NPA also harshly affect the capitals base of the public sector banks.
Due to the continuous rise of NPAs of any bank, the condition becomes chronic,
and the banks face severe crises while trying to stabilise again.
 The account holders lose their trust in the banks and want to withdraw their money.
This hugely affects the banking system and the bank teeters on the verge of
collapse. 
 The banks are forced to decrease their interest rate on saving deposits to increase
the margin as a result of high NPA. 

Correlation between Net Profit & Net NPA of Public Sector Bank.

Table: Correlation between Net Profit & Net NPA of Public Sector Bank
Correlation between Net Profit & Net NPA of Private Sector Bank

Table : Correlation between Net Profit & Net NPA of Private Sector Bank

Relationship between Net Profit and Net NPA

To establish relationship between Net Profit and Net NPA Pearson‟s Correlation has
been used. Pearson‟s Correlation for Public Sector Banks is -0.698 and for Private
Sector Banks is -0.407.

Interpretation:
As we can see that correlation for Private Sector Banks is -0.407 and for Public Sector
Bank is -0.698. It means that there is a negative relation between Net Profits and NPA
of Banks. But in public sector banks it stated that strongly negative relation between
net profit and net NPA.

It simply means that as NPA increase and Profit decreases.

 FINDINGS
 The rate of growth of Gross NPA to gross advances ratio of Public Sector
Banks and private sector banks is increasing over the years .
 The rate of growth of Net NPA to Net advances ratio of Public and Private
Sector Banks is increasing over the years.
 It states that Private sector banks makes more provisions in gross NPA & gross
advances as compared to Public Sector Banks. But also it is decreased over the
years.
 Private Sector bank is in beneficial position than Public Sector Bank in
standard asset ratio.
 The sub-standard assets of both the banks are decreasing both the banks are at
same position.
 Doubtful assets of Public sector bank and Private Sector Banks are quite same
but private sector banks have more advantageous position than public sector
banks.
 Loss assets of both banks are showing increasing trend.
 There is a Strong Negative relation between NPA & profits of public sector
banks and Negative relation between NPA & profit of private sector banks.
 NPAs reduce the earning capacity banks and badly affect the profitability of
bank.
 CONCLUSION
The NPA is one of the biggest problems that the Indian Banks are facing today. If the
proper management of the NPAs is not undertaken it would hamper the business of the
banks. If the concept of NPAs is taken very lightly it would be dangerous for the
Indian banking sector. The NPAs would destroy the current profit; interest income due
to large provisions of the NPAs, and would affect the smooth functioning of the
recycling of the funds.
Banks also redistribute losses to other borrowers by charging higher interest rates.
Lower deposit rates and higher lending rates repress savings and financial markets,
which hampers economic growth.
Although Public Sector Banks have good substandard assets when compared with
Private Sector banks but Private Sector Banks are more efficient than public sector
banks with regard to all the other factors which give them a good upper hand.
The Non-Performing Assets have always created a big problem for the banks in India.
It is just not only problem for the banks but for the economy too. The money locked
up in NPAs has a direct impact on profitability of the bank as Indian banks are highly
dependent on income from interest on funds lent. This study shows that extent of NPA
is comparatively very high in public sectors banks. Although various steps have been
taken by government to reduce the NPAs like S4A (Scheme for Sustainable
Structuring of Stressed Assets) and Indradhanush Scheme but still a lot needs to be
done to curb this problem. The NPAs level of our banks is still high. It is not at all
possible to have zero NPAs.
The bank management should speed up the recovery process. The problem of recovery
is not with small borrowers but with large borrowers and a strict policy should be
followed for solving this problem. The government should also make more provisions
for faster settlement of pending cases and also it should reduce the mandatory lending
to priority sector as this is the major problem creating area. So the problem of NPA
needs lots of serious efforts otherwise NPAs will keep killing the profitability of banks
which is not good for the growing Indian economy at all