Non-Performing Assets of Scheduled Public Sector Banks - Causes & Cures

Non-Performing Assets (NPAs) or Non-Recovered Loans or Bad Debts as they are commonly called, have been menace for the banking sector since independence. The Non-performing assets have been detrimental to the performance of the Indian Banks. Their continued amelioration in absolute terms proved the survival of Indian Banks very difficult, The Non-Performing Assets or bad debts or non-recovered loans of the banks which now stands at Rs.71,047 crores as against the total advances Rs.30,79,804 crores which is 2.30% percent of total advances as on 31^st March 2011. Therefore it is necessary that the level of NPAs should be kept at minimum possible level and hence the management of NPA is of prime concern. In the present study an attempt is made to diagnose the causes or reasons of NPAs and suggested right gestalts and proactive measures to arrest the Portfolio of NPAs with special reference to Standard Assets (SA), Sub-standard Assets (Sub-SA), Doubtfid Assets (DA) and Loss Assets (LA) of Scheduled Public Sector Banks. In this context, it iS recommended to Scheduled Commercial Banks to ensure that advances made to creditworthy and loyal customers as prevention is always led better than cure.