Rising NPAs: A Nightmare for Banking Industry
DOI:
https://doi.org/10.61841/bpamnn33Keywords:
NPA, Capital Adequacy Norms, Project Sakshat, OTS scheme, SARFAESI act.Abstract
Banks’s performance is the true reflection of economy of any country. The Indian
banking system has been facing serious problem of non- performing assets. NPA’s reflects the
status of liquidity, Banks’s management efficiency, net worth, profitability and eroded value of
assets of any banking company. The sound financial position of any company is reflected by level
of NPA’s in that particular industry. Growth in NPA reflects that there is a need of strengthen
the credit appraisal system of that industry because it shows the poor credit management system
of the banks and it has negative effect on profitability of banks. The Indian banking system is
facing the problem of continuously increment in level of NPA. This paper analyses the status of
recovery mechanism through i.e. PROJECT SAKSHAT, SARFAESI Act, One time settlement
(OTS) scheme, Lok-adalats and debt –recovery tribunals. This research paper also deals with
capital adequacy norms regarding NPAs, major reason for conversion of loans into NPAs and to
suggest measure for efficient management of NPA’s for improving both profitability and liquidity
position of banking industry
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