Non-Performing Assets (NPAs) in Indian Banks: Issues, Perspectives and Future Directions

The present study deliberates on the various issues, perspectives and future directions of non-performing assets (NPAs) in Indian Banks. The current banking environment shows that one of the major constraints of the competitive efficiency of banks is the tendency to accumulate poor quality of assets because NPAs act as a drag on profitability and inhibits the lending decisions of the banks. The essential component of a sound NPA management system is quick identification of non-performing advances, their containment at minimum levels and ensuring that their impingement on the financials is minimum. The approach to NPA management has to be multi-pronged, calling for different strategies at different stages a credit facility passes through. The study also discusses the global scenario of NPAs along with specific country analysis, the regulatory framework adopted in India along with a strategic course of action to stop conversion of loans and advances into NPAs, recovery of NPAs and converting NPAs into performing advances.