IJSRP, Volume 4, Issue 7, July 2014 Edition [ISSN 2250-3153]
Ashly Lynn Joseph, Dr. M. Prakash
A healthy and a sound banking system are very essential for an economy in order to grow and remain in this competitive environment. RBI and other regulatory bodies have taken several policies in the light of developing the functioning of the banking sector. The best indicator for the health of the banking industry in a country is its level of Non-performing assets (NPAs). It reflects the performance of banks. NPAs in the Indian banking sector have become a major concern for the Indian economy. NPA has a direct impact on the profitability, liquidity and solvency position of the bank. Higher NPA indicates inefficiency of the bank and lower NPA indicate better performance and management of funds. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled. This paper basically deals with the trends of NPA in banking industry, the factors that mainly contribute to NPA raising in the banking industry and also provides some suggestions how to overcome this burden of NPA on banking industry.