Journal of Commerce and Accounting Research

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Bank Credit, Economic Growth and Non-performing Assets-an Analysis of Indian Commercial Banking


Affiliations
1 Swarna Bharathi Institute of Management Science (SBIM), Khammam, Andhra Pradesh., India
2 College of Commerce and Business Management, Kakatiya University, Warangal, Andhra Pradesh., India
     

   Subscribe/Renew Journal


Commercial banks as a financial intermediary channelize the accumulated savings into productive purposes by lending. In doing so, they are exposed to credit risk, which is a result of wide array of factors. Credit is an essential factor for economic growth and rising levels of NPAs may hamper the overall objectives of credit growth in economic development. An understanding of the relationship between credit expansion, NPAs, and GDP growth rate is important in analyzing the credit function of commercial banks. Analysis of credit growth and NPAs across various banking groups such as public sector, private sector, and foreign banks provides important insight in understanding the relationship mentioned among banking groups and identifies the banking group that has been improving in asset quality. This paper provides a comparative analysis of the relationship among GDP growth rate, growth in bank credit and NPAs of scheduled commercial banks during 15 years period commencing from 1996-97 to 2010-11.

Keywords

Indian Commercial Banks, Bank Credit, Non-performing Assets And Economic Growth, Asset Quality in Banking, Credit Expansion, Credit Growth And NPAs, Public Sector Banks, Private Sector Banks, And Foreign Banks
Subscription Login to verify subscription
User
Notifications
Font Size


  • Banerjee, K. (2012). Credit and Growth Cycles in India: An Empirical Assessment of the Lead and Lag Behaviour. RBI Working Paper Series.

  • Burzynska, K. (2009). Financial development and economic growth: The case of Chinese banking sector. Master Thesis submitted to Lund University, Socialist Republic of China.

  • Chaudhary, S. (2012). Performance appraisal of Indian banking sector: A comparative study of selected private and foreign banks. International Journal of Research in Computer Application & Management, June, 2(6), 171-175.

  • Das, M. R. (2013). Economy is not the Villain. Business Line.

  • Gupta, B. (2012). A comparative study of non-performing assets of SBI & associates & other public sector banks.SIT Journal of Management, December, 2(2), 175-189.

  • Krishnankutty, R. (2011). Role of bank credit in economic growth: A study with special reference to north east India. The Economic Research Guardian, 1(2), 60-71.

  • Malyadri, P. et al. (2011). A comparative study of non-performing assets in Indian banking industry. International Journal of Economic Practices and Theories, 1(2), 77-87.

  • Miwa, Y. et al. (2000). Banks and economic growth: Implications from Japanese history, Discussion Paper 289, Harward Law School, Cambridge.

  • Patidar, S. et al. (2012). Analysis of NPA in priority sector lending: A comparative study between public sectorbanks and Private sector banks of India.

  • Prasad, G. V. B. et al. (2011). NPAs reduction strategies for commercial banks in India. International Journal of Management and Business Studies, September, 1(3), 46-53.

  • Rajput, N. et al. (2012). Profitability and credit culture of NPAs: An empirical analysis of PSBs. International Journal of Marketing, Financial Services & Management Research, 1(9), 91-109.

  • Subramanian, C. S. (2012). Non-performing assets and profitability of commercial banks in India: Assessment and emerging issue. Abhinav, 1(7), 61-69.

  • Siraj, K. K. et al. (2012). A study on the performance of nonperforming assets (NPAs) of Indian banking during post millennium period. International Journal of Business and Management Tomorrow, March, 2(3), 1-12.

  • Veerakumar, K. (2012). Non-performing assets in priority sector: A threat to Indian scheduled commercial banks. International Journal of Finance and Economics, (93), 6-23.


Abstract Views: 625

PDF Views: 2




  • Bank Credit, Economic Growth and Non-performing Assets-an Analysis of Indian Commercial Banking

Abstract Views: 625  |  PDF Views: 2

Authors

K. Ramanadh
Swarna Bharathi Institute of Management Science (SBIM), Khammam, Andhra Pradesh., India
Ch. Rajesham
College of Commerce and Business Management, Kakatiya University, Warangal, Andhra Pradesh., India

Abstract


Commercial banks as a financial intermediary channelize the accumulated savings into productive purposes by lending. In doing so, they are exposed to credit risk, which is a result of wide array of factors. Credit is an essential factor for economic growth and rising levels of NPAs may hamper the overall objectives of credit growth in economic development. An understanding of the relationship between credit expansion, NPAs, and GDP growth rate is important in analyzing the credit function of commercial banks. Analysis of credit growth and NPAs across various banking groups such as public sector, private sector, and foreign banks provides important insight in understanding the relationship mentioned among banking groups and identifies the banking group that has been improving in asset quality. This paper provides a comparative analysis of the relationship among GDP growth rate, growth in bank credit and NPAs of scheduled commercial banks during 15 years period commencing from 1996-97 to 2010-11.

Keywords


Indian Commercial Banks, Bank Credit, Non-performing Assets And Economic Growth, Asset Quality in Banking, Credit Expansion, Credit Growth And NPAs, Public Sector Banks, Private Sector Banks, And Foreign Banks

References