A STUDY ON NON-PERFORMING ASSETS MANAGEMENT AT STATE BANK OF INDIA, ANANTHAPURA GATE, BANGALORE KARNATAKA

Abstract

Non-performing assets (NPAs) are advances that are not repaid or serviced by the borrowers, posing a risk to the financial stability and profitability of banks. This research aims to inspect the management of NPAs at ‘State Bank of India’ (SBI), one of the largest public segment banks in India. The study has four objectives: to study the gross and net NPAs position at SBI, to analyse the sector-wise and segment- wise NPAs position at SBI, to ascertain the extent of provisions made for NPAs, and to determine the impact of NPAs and provisions on the profitability of SBI. The learning uses secondary data from the annual reports of SBI for the period from 2019 to 2023. The study employs descriptive statistics, correlation analysis, and hypothesis testing to analyse the data. The study discoveries that SBI has improved its asset quality and credit risk management over the five-year period, as evidenced by the declining trend of gross and net NPAs, the of NPAs in high-risk sectors, and the increase in provisions and profitability. The study also finds that there is a significant relationship between gross and net NPAs, and that there is a difference between provisions and net profit. The study suggeststhat SBI should focus on reducing the NPA ratio of the industries with high exposure and default rates, diversifying its loan portfolio, and strengthening its credit assessment, monitoring, and recovery systems. The study concludes that SBI has successfully managed its NPAs and enhanced its financial performance, which is beneficial for the country’s growth andeconomic growth. Key words: Non-performing assets, Gross NPA, Net NPA, Sector wise Performance, Provisions, Profitability