NPA Management in Banks: an Indian Perspective

Non-performing Asset (NPA) has emerged since over a decade as an alarming threat to the banking industry in our country sending distressing signals on the sustainability and endurability of the affected banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net-worth of banks and also erodes the value of the asset. The problem of NPAs is not only affecting the banks but also the whole economy. The paper deals with understanding the concept of NPAs, its magnitude and major causes for an account becoming non-performing and also strategies for reducing NPAs.