NON-PERFORMING ASSETS: IMPACT & REGULATIONS

ABSTRACT For an economy to flourish, it’s very important to have a strong banking sector as its failure can adversely impact other sectors. In India Non- performing Assets are a major concern but are the best indicators for the health of the banking industry. They reflect the performance of the banks and primarily indicate credit risks. NPAs are a predictable burden in the banking industry and hence the success of the bank depends upon how well it manages its NPAs. This paper begins with a theoretical approach towards the concept of NPAs through different views. Further, an effort has been made to look into the causes, impact, management and measures to recover the NPAs. Moreover, it discusses the role and regulation of RBI in recovering NPAs.