A Study of Status of Nonperforming Assets of Public and Private Sector Bank

Abstract

The true history of banking reveals that it concerns with money lending and newlinecollecting. It did, however, obey the basic rule of demand and supply, in which newlinethose with extra money lent it to people who needed it for more productive uses newlineand were prepared to pay a price for it. The activities were restricted to the newlinemoney lender knowing each and every person to whom he provided money. newlineProper control and coordination of these activities were necessary throughout newlinetime as the operations began to expand due to a rise in the number of clients. newlineThe Banking Industry in India experienced the rapid changes in them newlinefunctioning after the implementation of liberalization policies in 1991 by the newlinegovernment. The present study A Study of Status of Nonperforming Assets of newlinePublic and Private Sector Bank with reference to comparative study on select newlinepublic sector and private banks is accentuated more on managing the NPA s in newlinecommercial banks. Lending is one of the primary functions in Indian banking newlinesystem the study recommends the bankers to be more cautious due to mounting newlineNPA s in recent times. It is found in the present study that, there is a lack of newlinetransparency and supervision in disbursing and recovering the loan from newlineborrowers particularly from corporate. The banks are advised to maintain newlineproper capital adequacy rate to tackle operational inefficiency caused by the newlineNPA s the bankers should be more effective in preparing the strategies to newlinetackle the risk associating to liquidity, asset-quality and management newlineefficiency. The effective management of liquidity risk and asset reconstructing newlinebrings the positive result in cut down the financial losses occurred due to newlineNPA s. It is strongly advised to commercial banks both public and private to newlinefocus more on handling the liquidity risk and reconstructing asset quality.