Forecasting Non Performing Assets for Indian Banking Sector

Abstract

The Banking sector is considered backbone of the economy and has an essential role to play in the development of a nation. The persistent rise in Non-Performing Assets (NPAs) of the Indian banking sector now has become a cause for concern for the economy. The governmenst in developing countries such as India push for financial inclusion, leading to increase in the risk associated with bank’s asset. With this backdrop, this paper has been designed to analyze the problem of NPAs in the Indian banking system. This paper shall explore unique method to forecast the NPAs in Indian banking system in 2019 by using Tableau Software. To enable the said research the following variables, such as, Interest rates in relation to inflation rates, GDP & per-capita income, the banking norms as given the RBI and BASEL norms and studying the existing Gross and net NPAs of banks; are used. The focus is to design a model that would play a pivotal role for forecasting the future NPAs with reference to the Indian banks.