TREND AND RECOVERY OF NON-PERFORMING ASSETS IN INDIAN BANKING SECTOR

Abstract

The banking system of an economy  is foremost importance  for its financial  and economic development .It forms  the core   of the financial  sector and plays a critical  role  in transmitting  monetary   policy   impulses   to entire   economic system .Hence  the stability  of banking sector is paramount  importance  for the development  of an economy .An important  indicator  today that determines the solidity of the banks are the Non Performing Asset(NPA) Many banks  are facing the problem of NPAs  which not limited only to the banks but it is posing a hazardous threat to the overall economy. The threat is across the various sectors, and the Indian economy is very alarming. It is necessary to trim down the NPAs to improve the financial health in banking system.

An attempt has been made in this paper to understand NPAs, factors contributing to NPA, trend & recovery of NPA through various channels