Comparative Analysis of NPA of Public and Private Sector Banks

A bank may be defined as an institution that accepts deposits, makes loans, pays checks and provides financial services. A bank is a financial intermediary for the safeguarding, transferring, exchanging, or lending of money. A primary role of banks is connecting those with funds, such as investors and depositors, to those seeking funds, such as individuals or businesses needing loans. A bank is a connection between customers that have capital deficits and customers with capital surpluses. NPA refers to classification of loans and advances which are in arrears over a period of time. This comparative analysis of Non-performing assets of public and private sector banks helps us to understand the amount of non-performing assets and to analyse the liquidity position of each bank. The tools used to analyse the Non-performing assets of the banks are Capital adequacy ratio, Gross and Net NPA and correlation coefficient. These tools help in comparing the nonperforming assets of public and private sector banks and also in providing few suggestions with which banks can improve to do better in future.