Management of Non-Performing Assets with special reference to restructuring of advances by Public Sector Banks


  • Salini R Chandran Ph.D.Full-Time Scholar, Department of Banking Management, Alagappa University, Karaikudi, India.
  • Alamelu K Professor, Department of Banking Management, Alagappa University, Karaikudi, India


restructuring, stressed assets, impaired assets, PSBs, PVSBs


Non-Performing Assets (NPA) is the burning issue in the banking sector, which is caused by non-repayment of loans over a period of 90 days. The increased level of NPA drains the liquidity, profitability and operational efficiency of the banks. Restructuring of such advances helps the banks to reduce their NPA level to a great extent. Restructuring of a loan means changing its terms and conditions to mitigate the difficulties encountered by the borrower due to genuine reasons such as general economic recession or temporary cash crunch. Hence, the present study seeks to address the trends in the restructuring of advances of Public sector banks, by comparing restructured assets ratio of Public Sector Banks (PSBs) and Private Sector Banks (PVSBs)to study their asset quality.The data has been collected from the website of the Reserve Bank of India (RBI) and the websites of different banks in India. Statistical tools like percentages, graphs, mean, standard deviation, covariance, and ANOVA were utilizedfor data analysis. The study found that the Restructured Standard Asset ratio of PSBs had increased by 4.1 percent during the years 2008-2016, whereas the ratio of PVSBs had increased by just 1.1. The stressed asset ratio of PSBs had increased by 11.4 percent during 2008-2016, whereas the ratio of PVSBs had increased by just 1.4 percent maximum. The Impaired Asset Ratio of PSBs had increased by 11.7 percent during 2008-2016, whereas the ratio of PVSBs had increased by just 1.0 percent.


Arpita, G. (2014). Asset Quality of banks: Evidence from India (Macro Research report 2013-14). Retrieved from:
Batra, S. (2003). Developing the Asian markets for Non-Performing Assets-Developments in India. 3rd Forum on Asian Insolvency Reform (Fair), Seoul, Korea.URL Retrieved from:
Chakrabarty, K.C. (2013). Two decades of credit management in Indian bans: Looking back and moving ahead. Speeches. Retrieved from:
Khasnobis, S. (2005). NPA Emerging Challenges in India. Retrieved from:
Lokare, S. M. (2014). Re-emerging Stress in the Asset Quality of Indian Banks: Macro-Financial Linkages. RBI working paper series No. 3/2014. P. 20. Retrieved from:
Michael, J.N., Vasanthi, G., and Selvaraju, R. (2006). Effect of Non-Performing Assets on Operational Efficiency of Central-Cooperative Banks. Indian Economic Panorama, 16(3), 33-39.
Pallavi, C., and Leonardo, G. (2016). Bank Lending and Quality: The Case of India. BIS Working Paper No.595. p. 33.
Reserve Bank of India. (2012a). Report on Trend and Progress of Banking in India (Year Ended Report). Retrieved from:
Reserve Bank of India. (2012b). Review the existing prudential guidelines on restructuring of advances by banks/financial institutions (Mahapatra Committee (Report)). Retrieved from:
Selvarajan, B., &Vadivalagan, G. (2013). A Study on management of Non-Performing Assets in priority sector reference to Indian Bank and Public Sector Banks (PSBs). Global Journal of Management and Business Research, 13(1), 101-114. Retrieved from:
Sudhakar, V. K. (1998). Managing NPA Menace in Banks: Using Computers and Critical Factors. IBA Bulletin, XX. Pp. 8-16.