A STUDY ON IMPACT OF NON-PERFORMING ASSETS ON PROFITABILITY

This study explores the significant influence of non-performing assets (NPAs) on the profitability of financial institutions. Non-performing assets are loans where borrowers have failed to meet interest and/or principal payments for a specified period, typically 90 days. The escalation of NPAs can adversely affect the profitability of banks and financial entities. As NPAs increase, institutions must allocate more resources as provisions to mitigate potential losses from these delinquent loans, thereby reducing overall profits. Effective management of NPAs is crucial for maintaining a strong financial bottom line.