A Study of Gross and Net Non-Performing Assets of Select Public Sector Banks in India for the Period 2007-2008 to 2017-2018

The Non-Performing Assets (NPAs) are considered as one of the important parameters for anlysing the health of the Indian Banks. The Authors have taken a look at the Literature Reviews related to the non-performing assets related studies looked into by other Research Scholars. The authors in this research study has made an attempt to study the secondary data related to Gross and Net Non-Performing Assets or Loans of select Banks in India, which is available in the public domain of the regulators of Indian Banks i.e. Reserve Bank of India (RBI) from April 2007 to March 2018 and has performed the ABC analysis as per cumulative (decreasing method) to study the performance and the management and governance of those Banks. Finally, the authors conclude that some of the select Indian Banks taken for study appear in the various Groups formulated for study i.e. Group A (Poor Performance), Group B (Satisfactory Performance) and Group C (Good Performance) are thus a matter of great concern to the economy of the country.


Introduction
The entire world has accepted that the country is galloping towards being the third largest economy of the world in the near future and therefore, the financial and banking system or sector in India is required to play an important role to shape up its economy. The main business of the banking system is to cater to the financial needs of the business and individuals, but now it has also been vested with the responsibility to support other activities like the Insurance and supporting various schemes announced by the government from time to time. The Banks are required not only to safeguard the deposits of the Customers but also required to ensure that the loans or advances given are not defrauded by the business community or certain individuals for their own vested interest, as it has been observed in the recent past. Therefore, to arrive at the strength of the banking system in India the Non-Performing Assets (NPAs) are considered as one of the important parameter for analysis. A sound banking and financial system is therefore, needs now.

Literature Review
The objective of study of Sanjeev (2007) was to identify critical factors, which were responsible for the loans of the banks to go bad in the Indian commercial banking system. The Methodology adopted for the study was mainly related to primary data collected from credit managers of banks operating in India. Their study revealed that the external factors have a higher influence compared to the internal factors, which was also very surprising. The Economic downturn and willful default have been found to be most critical factor. Also the poor credit scoring skill of managers, absence of suitable administrative penalties and target completion have been found to have a significant influence amongst factors related with the loan appraisal mechanism of the banks. The seizure and disposal of collateral have found to be the toughest challenges amongst the factors related with the loan monitoring and controlling mechanism. The level of loan manager's motivation,, manpower, skill to appraise collateral, effort to reduce costs, government and political intervention and soft budget constraints have been found to have a lower influence.
However, the objective of study of Khushpatand & Rahul (2012) was to analyze the trends in Non-Performing Assets (NPAs) in the Indian Banking Sector from 2004-2011, to assess the contributing factors to the NPA in the Indian Banking Sector and to suggest measures to halt and curtail the rising burden of NPAs. They mainly dealt with the rising burden of NPAs in Indian financial system and their likely impact and measures to minimize such adverse impact on the Indian Keywords: Assets, Banks, Governance, Gross, Indian, Loans, Management, Net, Performance. .
banking system in particular and Indian economy in general. They were also of the view that the factor contributing to the rising NPAs is the upward shift in interest rates due to the Reserve Bank of India's (RBI) tight monetary policy for controlling inflation. The increased interest rate (floating interest) has increased the repayment burden of borrowers which is compelling them to default their interest payments and repayments. The authors concluded that the banks should focus on recovery of existing loans and be more circumspect in their credit appraisal, rescheduling of large corporate loans as rising interest cost and falling sales revenue may result in widespread defaults of corporate loans, phasing out of priority sector loans to 10% of the total loans so as to reduce the burden of NPAs in priority sector, making priority sector loans need-based rather than target based which results in poor credit appraisal and loan default. The authors arrived at a conclusion that the major contributor to the NPAs in banking sector was agricultural sector. NPAs in non-priority sectors are likely to increase due to decelerating trends in major sectors like manufacturing and infrastructure and slowing down of economy during 2012.

Definitions
3.I Non-Performing Assets (NPA) or Non-Performing Loans (NPL) The non-performing assets or loans in the books of the Banks are the loan that has been defaulted by the borrower. As per the regulators of Banks in India the loan becomes non-performing it is in default for 90 days.

Punjab and Sind Bank
The Gross and Net Non-Performing Assets or Loans of the Bank were mostly in Group C during the period April 2007 to March 2018, as can be seen from Appendix A, B, C and D.

Conclusion
The study of select Indian Banks for the period from April 2007 to March 2018 of all the groups together concludes that some of the Banks Net Performing Assets or Loans were very high and beyond the control of the Banks. The Banks have also been defrauded by large borrowers which have brought more strain on its assets. In some cases from the study it indicates that the performance of the Bank's management was one of the reasons for rise in non-performing assets or loans and also it can be seen that there were no heads in respect of some Banks during the study period and it is a matter of great concern. It is therefore, concluded that there should be a strong management for better results and governance and the Regulators must also have strong supervisory control and policies put in place for better results. Since the Banks under study are formed under the law of the Government, it becomes necessary for the Government to have in place heads for all the Banks, so that decision making becomes easier and also those large borrowers who are defrauding their loans should be also strictly dealt with. It is necessary to have a sound financial and banking system to strengthen the economy of the country.

Limitations
Only few selected banks are analyzed. Only the government banks were taken up for study and other type of banks i.e. Private, Co-operative and Foreign are not part of study. The qualitative aspect of the banking sector and the political environment prevailing in the country is also not part of the research study. It will be therefore, interesting to study the performance and management of the Banks after another five years after the merger of government banks into 4 to 5 big banks.