Non-performing Assets Research Articles

Analyzing Loan Default Trends and their Influence on Bank Profitability

Banks boost the e­conomy's growth. But, banks have major issues with overdue­, unpaid loans called Non-Performing Assets (NPAs). Many re­ports show NPAs are rising rapidly, showing the problem's se­riousness. Researche­rs study NPAs, looking at their status, causes, impacts, and effe­cts. On a large scale­, the rising bad debts hinder e­conomic growth and affect diverse pe­ople, businesses, and banks. This article­ gives a brief summary of banking, explains bad de­bts, and looks at possible reasons for their incre­ase. Our main goal is to clarify the major impacts of many bad debts on banks. We­ carefully study each potential e­ffect using existing rese­arch. Studies show NPAs hurt banks. Our re­search uses data already colle­cted to understand NPA problems in India. We­ carefully examined pape­rs and statistics. NPAs cause major issues for banks. Profits go down. Credit ratings worse­n. Banks cannot lend as much. Funding becomes more­ costly. We cite rese­arch to explain each effe­ct. This gives a full picture of how NPAs impact banks. To conclude, this pape­r combines the effe­cts of bad loans and suggests ways banks might take to fix this problem. It stre­sses how crucial immediate actions and smart plans are­ to get through this tough situation and protect the banking industry's stability and stre­ngth. KEY WORDS Banking sector, NPAs, economic growth, deterioration, financial stability, credit risk, crisis, research findings, bank profitability, credit rating.

Credit Growth and Risk Management in Indian Banks: Analysis Through Sectoral Deployment

This research paper explores the dynamics of sectoral credit deployment and its impact on risk management within the Indian banking sector over three fiscal years (2021-2023). Utilizing data from the Reserve Bank of India's annual reports, the study delves into the growth patterns of credit allocation to agriculture, industry, services, and personal loans, and assesses corresponding risk metrics such as the Gross Non-Performing Assets (NPA) ratio, Provision Coverage Ratio (PCR), and Capital Adequacy Ratio (CRAR). Descriptive statistics, correlation analysis, and regression modelling were employed to identify relationships and impacts. The findings reveal substantial credit growth in the services and personal loan sectors, accompanied by significant improvements in risk management indicators, including a marked reduction in the Gross NPA ratio and enhanced Provision Coverage Ratios. These trends highlight the sector’s increasing resilience and risk preparedness, reflecting broader shifts towards a consumer-driven financial landscape. The paper discusses the implications of these findings for banking stability and economic policy, emphasizing the need for nuanced regulatory frameworks to manage sector-specific risks. Future research could extend this analysis to predict long-term impacts of credit expansion on financial stability using advanced econometric models.

Loan Default Prediction Using Machine Learning

By anticipating loan defaulters, the bank is able to reduce its non-performing assets. Three primary predictive analytics techniques—I Data Collection, II Data Cleaning, and III Performance Assessment—are used to research the prediction of loan defaulters. Experimental investigations reveal that when it comes to loan forecasting, the KNN model performs better than the Decision tree model. Key Words: Machine learning, Loan prediction, Banking, KNN.

Analysis of public sector banks on the basis of equity research, determinants of banks profitability and nonperforming assets

Analysis of public sector banks on the basis of equity research, determinants of banks profitability and nonperforming assets

The “China Model”— Merits and Demerits, A Review of the Last 20 Years of the Chinese Economy

The “China Model,” which combines Chinese Communist Party (CCP) dictatorship with the use of a market economy, has been a long-term growth driver of the Chinese economy, but its content has undergone a transformation in terms of both governance and economic policy. In the early 2000s, competition among local leaders who were given sizeable discretionary authority led to dramatic regional growth but also produced various side effects. In the 2010s, however, a transformation to investment competition through debt occurred in local governments, resulting later in a real estate bubble and local fiscal crisis. The adverse effects of the Xi Jinping regime’s concentration of power have created balance sheet deterioration caused by years of excessive debt and overinvestment. The Chinese economy is now being forced to liquidate its deteriorated balance sheets, which have been weakened by years of excessive debt and overinvestment. The ineffective investments and the interest payments resulting from “implicit guarantee” by the governments have become a heavy burden on the economy, further distorting the distribution of wealth and leading to a slump in consumption. To break the current deadlock, major reform is needed, including the write-off of non-performing assets, which would bring about deflationary pressure, and the reduction of the role of state-owned enterprises, a change so significant that it would reshape the “form of the nation.” However, this would inevitably clash with President Xi Jinping’s pledge for “the great rejuvenation of the Chinese nation,” a promise made to secure his extended tenure. Given that an extraordinary concentration of power is centered on President Xi and the Chinese autocratic system lacks a mechanism for regime change, achieving such reforms will be very difficult.

A Study on Determinants of Non-Performing Assets in Indian Banks

The purpose of this paper is to empirically examine the effect of macroeconomic determinants on non-performing assets (NPAs) in the India’s commercial banks using a panel regression model. This study considers all public, private, and foreign sector scheduled commercial banks during a period of seventeen years from 2004-05 to 2021-22, and uses four macroeconomic variablesGDP growth rate, inflation rate, interest rate and global volatility index- to assess the impact of these variables on NPAs. The findings show that NPAs have a negative relationship with GDP growth rate, confirming a increase in economic growth would rise the incomes of people and businesses and improve the ability of repayment of loans to the banks. Remaining three macroeconomic determinants negatively associated with NPAs but they were statistically insignificant. The result of the empirical study suggests that efficient management policies at the macro level are required to reduce the level of NPAs and to maintain the stability of the performance of banks in India.

IMPACT OF NPA (NON-PERFORMING ASSETS) ON THE PROFITABILITY PERFORMANCE OF THE SELECTED PUBLIC AND PRIVATE SECTOR BANK

The banking sectors performance is crucial for any economy as it reflects the countrys financial health. Banks play a crucial role in mobilising funds from various sectors of the economy, including both priority and non-priority sectors, to finance diverse economic activities.For many years, the banking industry has faced significant challenges due to unrecovered loans.The presence of Non-Performing Assets (NPAs) has significantly hindered the development and growth of the economy.This study delves into the impact of NPAs on the profitability performance of selected public and private sector banks in India from 2018-19 to 2022-23. Analysing key ratios like Gross NPA, Net NPA, and Return on Assets (ROA), sheds light on the relationship between NPAs and bank performance. The findings highlight higher NPA levels in public sector banks, adversely affecting their profitability. Moreover, a significant correlation between NPAs and profitability underscores the imperative of effective NPA management for enhancing bank profitability. These insights are crucial for bank management, policymakers, and regulators to devise strategies for mitigating NPAs and fortifying the banking sector.

PROFIT EFFICIENCY OF INDIAN BANKS: POST-INTERNET ERA

The present study is mainly concerned with the analysis of profitability factors that influence the performance of banks after the introduction of internet banking. This study examines the trends in important banking indicators for 10 years period from 2013 to 2022. The study actually concentrates more on NPA and taken into consideration of profit efficiency variables in relation to internet banking of scheduled commercial banks. Therefore, this study focus on the detailed analysis of profit efficiency by incorporating all variable while keeping NPA’s ratios as central for study. The study have concluded the decline in NPA (Non-Performing Assets). Further, Reserves & Surplus is also analysed intensively to know the future prospects of scheduled commercial banks. Keywords: Profitability, Non-Performing Assets, Scheduled Commercial Bank and Internet Banking

Non-Performing Assets and Bank Profitability in Nepal: Evidence from a Panel Data

Non-Performing Assets and Bank Profitability in Nepal: Evidence from a Panel Data

Research on Disposal of Non-Performing Assets of Listed Companies

China's economic development is affected by adverse factors such as cyclical and structural adjustment of the domestic economy, but also by the sudden impact of the international political and economic environment, and the complex economic environment at home and abroad has greatly challenged the development of Chinese enterprises. The problem of non-performing assets is a prominent problem facing the high-quality development of China's economy. It requires both enterprises to regulate their own risks and asset management companies to properly and reasonably dispose of non-performing assets to prevent these assets from having an impact on systemic risks and then affecting other economies. Solving the problem of non-performing assets in a reasonable way can effectively deal with the non-performing assets, and then promote and prevent the further spread of the non-performing assets crisis of enterprises. This paper analyzes that the asset disposal mode of "stock plus bond" provides a reference for other NPL disposal methods, and helps other enterprises to dispose NPL efficiently. When dealing with non-performing assets, there are risks from debtors and creditors. To prevent and address these problems, detailed and precise asset-liability analysis, a well-developed restructuring plan, and enhanced collaboration between departments are required." The "equity plus bond" model combines the centralized disposal method of non-performing assets, which can effectively deal with these non-performing assets, better reduce risks and improve operations.

Examining the Efficacy of the Insolvency and Bankruptcy Code: A Performance Analysis

The Insolvency and Bankruptcy Code, 2016 (IBC) is a comprehensive Indian law aimed at consolidating insolvency resolution regulations across various entities including individuals, limited liability partnerships, and corporates. Its enactment has yielded favourable outcomes such as enhancing Non-performing assets recovery rates and improving the ranking in resolving insolvency cases. However, significant concerns persist, including delays in proceedings, absence of clear regulations for cross-border insolvency, and a shortage of tribunals. Addressing these issues is imperative for the effective functioning of the IBC.

Non-Performing Assets: A Current Overview of Selected Indian Public Banks

This research paper provides a detailed overview of Non-Performing Assets (NPAs) in selected Indian Public Banks as of the year 2024, aiming to assess current trends, sector-specific distributions, and the effectiveness of management strategies in mitigating NPAs. Given the critical role of NPAs in determining the financial health of banks and their potential impact on the broader economy, this study seeks to identify effective strategies for NPA management within the evolving economic and regulatory landscape of India. Utilizing a descriptive analytical approach, the research analyzes secondary data sourced from the Reserve Bank of India, covering the period of April 2023 to March 2024. The data were analyzed using the Statistical Package for the Social Sciences (SPSS) to perform a comprehensive examination of NPA trends across different sectors and banks, the impact of NPAs on bank profitability, and the recovery rates of secured versus unsecured NPAs. Key findings indicate significant variations in NPA levels and recovery rates among banks, with sector-specific vulnerabilities, notably in the SME sector, highlighting the need for targeted risk management strategies. The study underscores the importance of robust regulatory frameworks and strategic NPA management in enhancing bank profitability and ensuring economic stability. The implications of these findings are significant for policymakers, regulatory bodies, and banking institutions, advocating for strengthened NPA management practices and adaptive strategies to navigate the complexities of the banking sector.

Merger and Acquistion in India Banking System

The landscape of the Indian banking sector has undergone significant transformations over the past few decades, with mergers and acquisitions (M&A) playing a pivotal role in its evolution. This trend has been primarily driven by the need for stronger and more resilient banking institutions capable of supporting India's burgeoning economic growth and expanding global footprint. The Indian government, along with the Reserve Bank of India (RBI), has actively encouraged consolidation in the banking sector to enhance operational efficiency, achieve economies of scale, and improve risk management practices. The rationale behind the push for M&A in the Indian banking system includes addressing the issue of non-performing assets (NPAs), which has plagued many banks; increasing competitive advantage in both domestic and international markets; and fostering the development of banks that can be classified as global or regional champions. Moreover, the digital transformation in the banking industry and the emergence of fintech companies have further necessitated traditional banks to reassess their business models and market positions, often leading to strategic mergers or acquisitions. This paper examines the impact of M&A on the Indian banking system, highlighting key transactions that have reshaped the industry landscape. It delves into the regulatory framework governing M&A in banking, evaluates the successes and challenges post-merger or acquisition, and discusses the implications for stakeholders, including implications for market competition, customer service, and employee welfare. The analysis also explores how M&A activities align with broader economic reforms and financial inclusion goals in India.

Non-Performing Assets: The Cause of Concern for Banking Industry

Non-Performing Assets: The Cause of Concern for Banking Industry

Empowering Women: E-Shakti's Impact on Self-Help Groups Digitization and Financial Inclusion in India

The study assesses the influence of the National Bank for Agricultural and Rural Development’s (NABARD) Project E-Shakti on the digitization of Self-Help Groups (SHGs) and the economic position of women in India. The study evaluates the project's outcomes using data from NABARD's Status of Microfinance in India reports from 2007-08 to 2022-23. The number of SHGs credit linked, savings of SHGs, loans disbursed to them, loans outstanding against them, and non-performing assets (NPA) were the variables considered for the study. Trend analysis and correlation were applied to the available data. For the analysis of the data, the Python algorithm was used. The study's findings indicate that Project E-Shakti intensely boosted the number of districts served and SHGs linked to formal finance, reducing their dependency on informal sources. The project also resulted in a significant increase in loan disbursement to SHGs, indicating enhanced financial sustainability and accessibility. The digitization of SHGs improved women's economic conditions by allowing them to engage in income-generating activities. The programme helped to reduce non-performing assets, signifying its beneficial impact on the financial health of SHGs. Refinance to Non-Banking Financial Companies- Microfinance Institutions (NBFC-MFIs) showed a boost after E-Shakti but then a volatile pattern was observed in the subsequent years. Project E-Shakti was a success in terms of promoting digitization, increasing financial inclusion, and improving women's economic empowerment in SHGs. To maximize the long-term benefit of digitization programmes, the study proposes increasing their scope, investing in digital literacy training, and enhancing monitoring and evaluation procedures.

Promoting Women’s Empowerment in Rural Regions: A study of the Self-Help Group Bank Linkage Program in Jharkhand

Historically, many women in India have faced barriers in accessing formal banking services due to cultural norms, lack of awareness and geographical constraints which often limit their ability to engage with mainstream financial institutions. The SHG Bank Linkage Programme, a leading initiative in India, has become a significant tool for societal development specially for women in India. By bridging the gap between marginalized communities and the formal banking system, it is fostering positive change across various social, economic and individual spheres. The collective spirit and peer support within SHGs foster social responsibility and financial discipline, leading to stronger communities and better preparedness for emergencies. This program promotes micro entrepreneurship by facilitating micro credit, resulting in the generation of employment, heightened production and positive impact on the local economy. By supporting women-led SHGs, this programme promotes gender equality and unlock their economic potential, contributing to overall economic development. This research paper analyses the remarkable progress of women-led Self-Help Groups through the SHG Bank Linkage Programme in Jharkhand over five years. The paper specifically focuses on four key factors: Savings, Loan Disbursed, Loan Outstanding, and Non-Performing Assets (NPA). Through the examination of these indicators, the paper aims to present a comprehensive picture of the impact of the SHG Bank Linkage Programme on women's financial inclusion and economic empowerment. This research paper adopts a descriptive approach, relying solely on data collected from secondary sources. This research paper shows how SHG Bank Linkage programme promotes social inclusion and reduced societal discrimination against marginalized communities and women in Jharkhand

Effect of Capital Structure on Financial and Social Performance of Indian MFIs: A Bibliometric Analysis and Systematic Literature Review

Microfinance Institutions (MFIs) play a crucial role in financial inclusion and social empowerment, with funding sources significantly influencing their overall performance. Despite existing research efforts on the relationship between capital structure and the performance of MFIs, a notable gap remains in the literature, particularly concerning Indian MFIs. This study aims to address this void by examining the influence of capital structure on the financial and social performance of Indian MFIs. The study aims to assess the effect of capital structure on financial and social performance through a systematic literature review of 20 articles using Scopus and Google Scholar. Network analysis and systematic literature review methodologies, employing tools such as Bibliometrix and VOSviewer, were used to scrutinize the selected records. Findings reveal inconclusive outcomes on the effect of capital structure on MFIs' performance, specifically in the heterogeneous context of India, highlighting that while Indian MFIs utilize debt financing to expand services, it may elevate credit risk and non-performing assets, negatively impacting overall performance. The empirical results can guide MFIs in optimizing their capital structures for financial self-sufficiency, enabling better services for underserved populations. The study underscores the need for more empirical analyses, incorporating additional variables and a broader range of MFIs, to enhance reliability and provide actionable recommendations for financing structures and diversified funding sources.

Loopholes in the Indian Banking System concerning Non-Performing Assets (NPAs) – A Case Study of “Axis Bank and HDFC Bank”

Abstract -The paper presents a comparative case analysis of two leading banks, Axis Bank and HDFC Bank. The rising tide of Non-Performing Assets (NPAs) in the banking sector is a major threat to financial stability and economic progress. The case study uncovered severe deficiencies in risk management, credit evaluation, and regulatory compliance, which have resulted in a considerable accumulation of Non-Performing Assets. The banks' exposure to economically sensitive sectors amplifies the impact of downturns on asset quality. The limitations in credit risk assessment underline the necessity for increased due diligence. Regulatory frameworks, such as the Insolvency and Bankruptcy Code, and prompt corrective action have a significant impact on NPA responses. The findings highlight the complicated interplay between internal banking practices, regulatory frameworks, and economic conditions that affect a bank's financial performance. Addressing discovered weaknesses inside both these banks is important to the stability of India's financial system. The implications, as indicated by rising NPAs, are felt throughout the sector, jeopardizing overall resilience. Addressing these problems is crucial for reducing systemic risks, preventing a credit crisis, and rebuilding trust in the financial industry. A better banking system is critical for India's financial stability, economic growth, and stakeholder trust. As major private sector players, Axis Bank and HDFC Bank’s successful remediation set a precedent, emphasizing the need for excellent risk management, regulatory compliance, and strategic adaptation. Key Words: Axis Bank, HDFC Bank, Non-Performing Assets, Risk Management, Regulatory Compliance, Financial Stability, Economic Impact

Loopholes in the Indian Banking System concerning Non-Performing Assets (NPAs) – A Case Study of “Axis Bank and HDFC Bank”

This paper presents the development and implementation of an innovative IoT-based Surveillance Robot designed for remote control, utilizing a Wi-Fi module and a smartphone interface. The portable espionage robot integrates cutting-edge technology, featuring an AI Thinker ESP32-CAM module with an ESP32-S processor, an OV2640 camera, motor drivers, and a robust chassis with two moving wheels. The ESP32-CAM allows the capture and storage of images on a microSD card, facilitating efficient data management. The robot employs the HTTP Communication protocol, enabling users to access live video streaming from the OV2640 camera through a standard web browser. The web interface includes intuitive directional buttons for seamless control, allowing users to command the robot to move left, right, forward, and backward. The locomotion of the robot is achieved through two DC motors integrated with a Robot chassis and an L293D motor driver module. The real-time video feed is transmitted wirelessly to the user's smartphone over a Wi-Fi infrastructure, providing a live- streaming experience. This wireless surveillance robot finds applications in various scenarios such as war fields, disaster management, and beyond, showcasing its versatility in remote monitoring and reconnaissance tasks. Keywords: IoT, Surveillance Robot, Wireless Control, ESP32- CAM, HTTP Communication, Video Streaming, Smartphone Control, Disaster Management, Robotics, Remote Monitoring, Reconnaissance.

Priority and non-priority sector GNPAS in Indian commercial banks: a comparison between sub-sectors

Purpose This study aims to examine the impact and contribution of priority and non-priority sectors, as well as their sub-sectors, on the gross non-performing assets of public, private and foreign sector banks. Design/methodology/approach The Reserve Bank of India's database on the Indian economy is used to retrieve data over 13 years (2008–2021). Public sector (12), private sector (22) and foreign sector (44) banks are represented in the sample. Two-way ANOVA, multiple regression and panel regression statistical techniques are used in SPSS and EViews to examine the data. Further, the results are also validated by using robustness testing by applying the fully modified ordinary least square (FMOLS) and dynamic least square (DOLS) regression. Findings The results showed that, for private and foreign banks, the non-priority sector makes up the majority of the total gross non-performing assets, although both the priority and non-priority sectors are substantial for public sector banks. The largest contributors to the total gross non-performing assets in public, private and foreign banks are industries, agriculture and micro and small businesses. The FMOLS displays robustness results that are qualitatively similar to the baseline result. Practical implications Based on the study's findings about the patterns of non-performing assets originating from these specific industries, banks might improve the way in which these advanced loans are managed. Originality/value There has not been much research done on the subject of sub-sector-specific non-performing assets and how they affect total gross non-performing assets across the three sector banks. The study's primary focus will be on the issue of non-performing assets in the priority’s and non-priority’s sub-sectors, namely, agricultural, micro and small businesses, food credit, industries, services, retail loans and other priority and non-priority sectors.