The Impact of Non Performing Assets on Bank Performance with Reference to State bank of India Kalaburagi District

Abstract

In emerging economies, banks not only carry increased responsibility for achieving newlinethe social goals of the government but also play a more significant role in financial newlineintermediation. The health of the banking industry is inevitably linked to the growth of the newlineoverall economy and the linkage between banking and economic development. The recent newlineglobal financial crisis made clear how crucial a sound banking system is. It underlined the newlineimportance of paying attention to adequate monitoring and bank non-performance newlineevaluations because these factors might affect their total productivity, performance, newlineefficiency, and profit. newlineNon-performing assets are not solely a consequence of loans and advances; they newlineare also impacted by other bank performance metrics and macroeconomic factors. This newlinestudy explained the trend in NPA movement as well as the moderating and mediating newlineeffects of key bank performance and macroeconomic indicators on NPA incidence. newlineThe RBI has been taking measures to control the NPA menace. Some legal newlinemeasures such as debt recovery tribunals (DRTs), Lok Adalat s, the SARFAESI newline(Securitization and Reconstruction of Financial Assets and Enforcement of Security newlineInterest) Act, and the Insolvency and Bankruptcy Code, 2016 have been introduced for the newlineresolution of NPAs. Recapitalization of public sector banks and setting up of stressed asset newlinemanagement verticals are some other steps taken by the RBI. newlineThis study aims at identifying the reasons for Non-Performing Assets (NPAs) in newlinebanks and examining the impact of non-performing assets on bank performance. The study newlinefollows a combination of descriptive and analytical research design. As part of the newlinedescriptive research, this study outlines the bankers perception and self-reported status of newlineNPAs in the bank branches of State Bank of India in Kalaburagi District of Karnataka newlineState in India and describes the strategies being used by these bankers to reduce the NPAs. newlineOn the analytical front, this study investigates the relationship between various causal newlinefactors and th