Non Performing Assets in Public Sector Banks – A Comparative study between SBI Group & Nationalised Banks Group

Abstract

The growing Non Performing Assets in the banking industry in India is putting an immense pressure on profitability and credit creation capacity of banks. Particularly, the public sector banks in India are highly troubled by the trapped funds in NPA, borrowed from their depositors. In the present era of globalization where Indian banks are going to adopt BASEL-III norms, rising NPA is putting much strain on banks to meet the international standards of capital requirement. Further, the growing priority sector NPA has emerged as a serious concern for all public sector banks. The present study attempts to investigate into the relative impact of Priority Sector NPA, Non Priority Sector NPA and Public Sector NPA on Gross NPAs of SBI Group and Nationalised banks group. Further, the composition of Priority Sector, Non Priority Sector and Public Sector NPA and their growth have also been compared. Finally, a comparative study of composition and growth of constituents of Priority Sector NPA such Agriculture NPA, NPA from SSI and Other Priority Sector NPA has been done. The results indicate significant impact of Priority and Non Priority sector NPA on Gross NPA of both banks group while the Other Priority Sector NPA found to be affecting Gross NPA of SBI Group only. Further, no significant difference was found between the compositions and growth of Priority, Non Priority and Other Priority Sector NPA of both banks group moreover, within Priority Sector, no significant difference was found between the composition and growth of Agriculture NPA, SSI NPA and Other Priority Sector NPA in both banks group.