NON-PERFORMING LOAN ESSENCE IN THE BANKING SYSTEM OF UZBEKISTAN

Abstract

At the field of financial economics, non-performing loans (NPLs) at commercial banks are an important subject of study. Non-performing loans, which are defined by late or defaulting payments, have arisen as a key problem in the financial industry owing to the possible consequences for both individual banks and the whole economy. The economic relevance of NPLs stems not only from their immediate influence on bank financial health, but also from their broader implications for capital allocation, loan availability, and general economic viability. NPLs can reduce bank profitability, deplete capital buffers, and limit lending capacity, all of which can have an impact on the economy as a whole, including investment, consumption, and employment.