Non Performing Assets (NPA) in Banks – Control is a Panacea for Bank’s Profitability and India’s Economic Revival – How is Possible?

Abstract

In this competitive era, interest margins of banks are squeezed and hence maintenance of good quality of advances is absolutely imperative to improve the net interest margin (NIM) and profitability. Almost all the Public Sector Banks are having their Gross NPA ratio of more than 5% and in some banks it goes beyond 10% or so. To improve the profits, it is imperative to maintain Gross NPA ratio to less than 2%. This article will highlight the common causes of NPAs and the measures to control the NPAs.