A study on effects of nps and recoveries with special reference to select banks in india

Abstract

Banking sector was established to regulate financial discipline in our country. newlineIt mainly focused on the development of socio-economic status of the common people newlineby providing the financial assistance, savings facilities, loans and advances etc. It also newlinedeveloped savings habit among the people by ensuring safe deposits and locker newlinefacilities. Initially it was started by procuring deposits from the public for a lesser rate newlineof interest and the same was spread out to encourage socio-economic activities by newlineearning an interest with a reasonable increase to maintain a profit-margin ratio. The newlinemain activities of the bankers are to mobilize deposit with lower of interest, lending newlinethe same for socio economic activities as loans. newlineThe financial sector reforms initiated in 1991 have commendably changed the newlinevisage of the Indian banking. For making clarity to the accurate and actual income by newlineway of interest is being modified, by way of the introduction of Narasimhan newlineCommittee (1991). Nonperforming assets is the best indicator for the health of the newlinebanking industry. Generally reduction in Nonperforming Assets shows that banks newlinehave strengthened their credit appraisal processes over the years and increased in newlineNonperforming Assets shows the necessity of provisions, which bring down the newlineoverall profitability of banks. Based on the net interest income and capital adequacy newline