Trends and Factors Affecting Non-Performing Assets (NPAs) in Indian Banks

The increasing levels of non-performing assets (NPAs) in Indian banks have raised concerns about the sector’s health. Factors such as sectoral disruptions, economic instability, and insufficient credit risk management contribute to NPAs in India. Public sector banks, due to their higher exposure to sectors like real estate and infrastructure, often exhibit higher NPA ratios than private banks. Additionally, lengthy legal proceedings, poor corporate governance, and regulatory gaps exacerbate the problem. Addressing this requires banking reforms, improved financial regulations, and the use of modern technology for credit risk management. This study provides insights for policymakers and banking professionals to mitigate risks and enhance asset quality by pinpointing the main causes of NPAs.