Authors

1. Dr. Swati Jain

Affiliation

• Associate Professor, School of Management and Commerce, Poornima University, Jaipur

Abstract

The growth of the economy depends upon the competence and stability of its banking sector. The
most significant factor which measures the wellbeing of the banks in India is the extent of Non-
Performing Assets. NPAs have straight consequences on the financial performance of banks i.e. their
profitability. It signifies the effectiveness with which a bank is optimizing its total resources and
therefore, serves as a guide to the extent of asset utilization and managerial efficiency. NPAs
influences the prosperity of the banks in terms of mounting cost of capital, escalating risk perception
thereby disturbing liquidity arrangement of banks. This paper attempts to analyze the factors
responsible for increasing NPAs and suggest measures which banks can take to reduce their NPAs in
order to boost their profitability and competency. This research study includes both type of data, i.e.,
primary data and secondary data. The research tool used for the study is Factor analysis tool for
recognizing the most imperative factors responsible for increasing NPAs in the Banking Sector of
India.

Keywords

Non-performing Assets, Profitability, Indian Banking Sector

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