SAI : 2016SCIA6DFEXXXX, SCIAID : 20166DFE , e-ISJN- A4372-3068
Impact of Non-Performing Assets on Bank Lending Behaviour: A case of Indian Banking Industry
Dr. Komal Raghav
Sound financial health of banks is the pillar for the development of a country’s economy and the soundness of banks is measured through proper and adequate fund flow in banking system. But this thing can’t be seen in Indian banking industry just because of rising Non-performing assets (NPAs). The problem of NPA has deteriorating the Indian banking financial system for years now. Still in 2018, we are not in a position to solving the large problem of non-performing asset (NPA). The rising NPAs have curtailed the lending capacity of state-owned banks as they have make extra provisions for bad loans. To strengthen the Indian banks, the government has approach with a Rs. 2.12 lakh crore large integer recapitalisation set up and Rs.80,000 crore for recapitalisation bonds in ending March, 2018.The aim of this study is to understand the impact of non-performing assets on lending behavior of banks during financial crisis, in order to know whether there is reduction in banks lending activity if there is increase in credit risk during the observed period. In present study, both primary and secondary data is used by researcher to find out the results. During study, it has observed that NPAs level is rising continuously in Indian banking industry and there is a negative impact of NPAs on bank lending behavior.
Indian banks, Non Performing Loans, NPAs