Asset Quality Concern in Public and Private Sector Banks in India: An Empirical Assessment

Abstract

In emerging economies like India, banks are more than little wagon of financial Intermediation underpinning the financial progress and carry the additional responsibility of attaining the government’s socio-economic objectives as well. The issue of the recent deterioration of asset quality in banks has emerged as the key concern as NPAs are considered a vital parameter to judge the performance and financial health of the banks. In this study, an attempt has been made to examine the effect of NPAs on the performance of public and private sector banks in India. It is witnessed that the NPAs have an adverse effect on the performance of both groups of banks. However, public sector banks have been affected more in comparison to their private counterparts.