TRENDS IN THE LEVEL OF NPA OF PUNJAB NATIONAL BANK AND HDFC BANK: A COMPARATIVE STUDY

1Dr. Ashish C. Mehta
Assistant Professor, G.H. Patel PG Institute of Business Management, Sardar Patel University, Vallabh Vidyanagar
2Ritesh Patel

Research Scholar, G.H. Patel PG Institute of Business Management, Sardar Patel University, Vallabh Vidyanagar

Abstract:

Finance is an important common thread which brings many sectors together and acts as catalyst for economic development of the country. The role of banking sector in economic transformation is significant as banks play vital role in providing the desired financial resources to the needy sectors. Non-performing assets (NPAs) are a key concern for banks in India. They are the best indicator of the health of the banking industry. Public sector banks have displayed excellent performance and have beaten the performance of private sector banks in financial operations. However, the only problem of these banks is the increasing level of nonperforming assets, year by year. On the contrary, the NPAs of private sector banks have shown a decline. A reduction in NPAs shows that banks have strengthened their credit appraisal processes over the years. The increase in NPAs shows the necessity of provisions, which bring down the overall profitability of banks. Therefore to improve the efficiency and profitability of banks, NPAs need to be reduced and controlled. This research paper is an effort to make a comparative study between the Level of NPA between Punjab National Bank and HDFC Bank.

Keywords: Gross NPA (Non Performing Assets), Net NPA,  Public sector bank, Private sector bank

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