An Empirical Assessment of Non-Performing Assets in Indian Scheduled Commercial Banks

— Banking sector is one of the important sectors, which plays a significant role in the economic development of a country. It advances loans to various sectors viz. agriculture, industrial, infrastructure, and so forth and thereby accelerates the cycle of economic growth in the country. Hence, it is very imperative that the credit supply should be smooth in an economy to run the business cycle of various entities efficiently. However, in recent years it has been seen that banks become cautious in advancing loans. The reason is massive amount of Non-Performing Assets (NPAs) which affects banking operations severely. NPAs are those assets on which banks do not receive interest income. The present study discusses the concept of NPAs, its types, asset classification, and provisioning norms as per Reserve Bank of India (RBI) guidelines. The study further analyses the empirical position of NPAs in Indian Scheduled Commercial Banks (SCBs) and suggests measures for reducing them.