AN EMPIRICAL STUDY ON THE MOVEMENT OF NON-PERFORMING ASSETS (NPAS) IN INDIAN COMMERCIAL BANKS

Abstract Purpose: Indian economic growth and development rely greatly on the nation's financial institutions. The purpose of this research is to study the movements of NPAs in the Banking sector and to examine the impact of NPA Additions, Reductions, and Write-offs on bank NPAs. Methodology: This study compares the NPAs movements of the Statebank of India (SBI), and Bank of Maharastra (BOM) from Public Sector Banks (PSBs) and ICICI, Nainital Bank (NB) from Private Sector Banks (PSBs). The data consists of 15 years from 2007-08 to 2021-22. Data was gathered from annual reports and the RBI website. Compound annual growth rate (CAGR), and Descriptive statistics, were used for analysis. To test hypotheses ANOVA, t-test and Pannel Regression are calculated. Findings: The research found that there is an increasing trend in GNPA of all the SCBs. The increasing NPA additions put an additional burden on banks’ profits and if profits are not sufficient to write off bad loans then the capital is used to write off. Mean GNPA growth rates were statistically significant across all time periods for SBI, NB, PSBs, PRSBs, and SCBs. Mean NNPA growth rates for SBI, BOM, ICICI, NB, and PRSBs were not statistically significant. There is no significant difference between sample banks and bank groups in Year-Over-Year Growth in % of GNPAs, and NNPAs. Panel Regression analysis also states that the Random Effect Model is appropriate to study the relationship among these variables. Originality: We promise that the work in this article is unique