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