A STUDY ON NPAS OF SELECTED PRIVATE & PUBLIC SECTOR BANKS IN INDIA

Banks play a very important role in any Financial System. It is the backbone of the Indian Financial System. The Rising NPA’s of the Banks in India for the last 5 years has really posed a threat to the Indian financial system. Recently Standard & Poor Global Rating agency has expected the NPA’s of Indian banks to remain elevated at 11.5 %. NPA helps to measure the Performance of any bank. It is quite evident that the Recent Covid Pandemic has badly hit not only India but the entire world to a greater extent. The Public and Private sector banks in India both have been adversely affected by the Rising NPA. Through this research, it has been observed that Public sector banks are more adversely affected than Private sector banks. My Study Focus on the Trend & Differences in the Non-Performing Assets of the Selected Indian Public and Private Sector Banks.


INTRODUCTION
The Indian Banking sector plays a very important role in the Indian Financial system. It acts as a link between lender and borrower. Banking in India has played a very important role to develop the saving habits among the masses. It helped to channelize the savings of the people into investment. In the past three decades Indian banking has outperformed and helped to develop the financial system in the country. Nevertheless Indian banking system has witnessed many revolutionary changes, for e.g. Nationalization of 14 major Private Banks in the year 1969. The Banking sector in India currently consist LITERATURE REVIEW Joseph and Prakash (2014) this paper deals with the comparative analysis of advances & Non-Performing Assets of Public & Private sector banks. 5 years data from the year 2008-2013 has been used for analyzing. It was observed that Public sector banks are having more NPAs than Private sector banks. Secondary Data was used for the Research Purpose. Chaudhary and Sharma (2011) the Paper focus on comparing NPA data of Public & Private sector banks. The trend of NPA also have been studied and it was observed that, Public sector banks are unable to compete with private sector banks and needs to improve its performance in Management Information system and also there is a larger need of Imparting training to employees of Public sector banks to make them competitive in comparison with private sector bank employees. Das and Dutta (2014) the study is done on comparing the NPAs of Public sector banks only. 26 public sector bank data on NPA was used. The comparison was done between SBI Associates and other Public Sector banks. Using the Anova test it was found that there is no significant difference in NPAs of SBI Associates and other Public sector banks. Kaur and Saddy (2011) the paper mainly focused on understanding the concept of NPA & factors contributing towards NPA. It also studies how NPA affect banking operations.
Mittal and Suneja (2017) the paper mainly examine the level of NPAs in the Indian banking sector and then analyzing the causes for Increasing NPAs. The study also concludes that the magnitude of NPA in Public sector banks is more than Private sector banks. Miyan (2017) comparative analysis of selected Private and Public sector bank has been done on various performance parameters such as GNPA, ROA, and NNPA. 5 years data was use for analysis from 2011-2016. It was found that Performance of PSU banks is way behind the private sector banks. T-Test was used to find the significant difference. Kumar et al. (2021) the study examines the impact of NPA on Profitability of banks. Only 2 banks HDFC & SBI were used for comparison. It was found that Increase in the provisions for NPA declines the profitability of banks. It was also found that If NPAs are reduced then the Public sector banks could have a higher profitability. Singh (2013) the magnitude of NPA is comparatively higher in public sectors banks than private sector banks. To improve the efficiency and profitability of banks the NPA need to be reduced and controlled. Das and Dutta (2014) the study is done on comparing the NPAs of Public sector banks only. 26 public sector bank data on NPA was used. The comparison was done between SBI Associates and other Public Sector banks. Using the Anova test it was found that there is no significant difference in NPAs of SBI Associates and other Public sector banks.
Kaur and Saddy (2011) the paper mainly focused on understanding the concept of NPA & factors contributing towards NPA. It also studies how NPA affect banking operations. Mittal and Suneja (2017) the The paper mainly examine the level of NPAs in the Indian banking sector and then analyzing the causes for Increasing NPAs. The study also concludes that the magnitude of NPA in Public sector banks is more than Private sector banks. Miyan (2017) comparative analysis of selected Private and Public sector bank has been done on various performance parameters such as GNPA, ROA, and NNPA. 5 years data was use for analysis from 2011-2016. It was found that Performance of PSU banks is way behind the private sector banks. T-Test was used to find the significant difference. Boddu (2019) this study compares the Loans and Advances, NPAs of both public and private sector banks in India to explore the preventive measures to control the rising NPAs. Suitable preventive measures help banks to decrease the level of NPAs in India. A lower level of NPAs helps the banks in consolidating their position, increasing confidence to depositors and increasing market share of the banks. Kumar et al. (2021) the study examines the impact of NPA on Profitability of banks. Only 2 banks HDFC & SBI were used for comparison. It was found that Increase in the provisions for NPA declines the profitability of banks. It was also found that If NPAs are reduced then the Public sector banks could have a higher profitability. Sahoo and Majhi (2020) the Paper analyze the recovery mechanism of NPAs with its three important wings i.e. recovery through Lok Adalat, Debt Recovery Tribunals (DRTs) and Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act (SARFASEI Act) and its impact on NPA.  To suggest few measures to improve the level of NPAs of banks.

RESEARCH METHODOLOGY
As per the literature review it has been observed that the present study mainly focus on NPAs comparison of Public sector banks and Private sector banks. My study also focus on comparison of NPA level of Private and Public sector banks. Only selected prominent banks from each Private & Public sector is taken for the study. Last 10 years data has been used for the meaningful study on NPAs. The secondary data has been used for analysis which is mainly taken from authentic sources such as RBI Publications etc. The data has been analyzed in tabular form, Trend analysis and ANOVA test has been used to find out significant difference.  Gross NPAs of HDFC Bank are comparatively Low than that of than ICICI & Axis bank, whereas ICICI NPA are highest in comparison of other two banks.  All these bank have the higher NPAs for the year 2019 & 2020 mainly due to corona pandemic.  All the Banks have seen decrease in NPAs in the year 2020 in comparison to the year 2019.  The financial position of HDFC in terms of Gross advances and NPAs is far better than other two banks.       All the banks whether Private or Public sector banks could see increasing trend in the level of NPAs since the year 2016 except HDFC Bank whose Level of NPAs is stable throughout the periods.

T-Test Analysis
A t-test is a type of inferential statistic used to determine if there is a significant difference between the means of two groups, which may be related in certain features. A t-test is used as a hypothesis testing tool, which allows testing of an assumption applicable to a population.

Hypothesis
Ho: There is no significant difference in the average values of the selected Private and Public sector banks. H1: There is significant difference in the average values of the selected Private and Public sector banks. As P value is less than 0.05 it can be interpreted that Ho will be rejected and H1 would be accepted as there is a significant difference between the Average values of NPAs of Selected Public & Private sector banks.

Measures to Reduce NPAs of the Banks
 Conducting Credible Credit appraisal of the company before giving loan.  Continuously assessing the financial position of the company after giving Loan to avoid further bankruptcy and take timely action  Selling off NPAs  Use of Sarfaesi act, 2002  Use of Insolvency Bankruptcy Code, 2016

Importance of Insolvency & Bankruptcy Code, 2016 in Recovery of NPAs of the Financial Institutions
Insolvency & Bankruptcy Code, 2016 was introduced to resolve the claims which involved Insolvent companies. Although many other law were present in India to deal with the insolvency problem such as Sarfaesi Act, 2002, Debt Recovery Tribunals and Lok adalats. The average recovery rate after enactment of IBC.2016 has increased to around 45%. The average recovery time has also been decreased dramatically from 4 years earlier to this act. Insolvency & Bankruptcy code has remarkably help in speedy recovery of loans on the basis of which Indian ranking in "Ease of Doing Business" 2020 Report of the World Bank has improved to 63 rd Position from 142 nd Position prior to the Introduction of this act.
FINDINGS  The study makes it clear that all the above banks both private and public sector banks are facing serious problem of NPAs.  Rising level of NPAs are impacting the Profitability and Liquidity of these banks.  Condition of Public sector banks is very poor due to Rising NPAs.  Performance of Private Banks is better than Public sector Banks in case of NPAs.  HDFC Bank is best performer when it comes to NPAs. The level of NPAs is stable throughout the years.

SUGGESTIONS
 Evaluate CIBIL score of the borrower before giving any loan.  Circulating Information of Defaulters in the Society.  Continuously assessing the financial position by the lender of the borrower for timely recovery or avoiding huge losses.  Using the speedy dispute settlement mechanism such as Insolvency & Bankruptcy Code, 2016 for the recovery of bad Loans.  Lending more to the Growing Sectors in the economy.

CONCLUSION
or less stable since last 10 years. Rising NPAs since last 5 years is a matter of concern for Indian banking system and also Indian financial system. It is equally important to take necessary steps by the banks and at government level to bring the NPAs down to restore the confidence in the banks. These banks should more focused on providing Quality Loan as "Prevention is always better than Cure" yes recent steps taken by government in respect of Insolvency code has got some relief to the banking sector to get fast recovery of loans but this mechanism of recovery of loans is post mortem and cannot enhance the economy, Ultimately giving Quality Loans is essential for the development of the economy and meeting its need.

FUTURE SCOPE OF THE STUDY
 The Research can be extended to other private and public sector banks.  Foreign banks can also be included in comparison of level of NPAs.  Many Variables other than NPAs can be used for meaningful comparison between banks such as Capital Adequacy Ratio, Liquidity Ratio, Profitability Ratio, etc.  Other statistical test could also be used to analyse the data.