Examining non-performing assets in financial institutions in India

The research paper examines and analyses the reasons responsible for increased non-performing assets. It also analyses the reasons that restrict the loan's effective monitoring and gives credit risk management recommendations. The sample for this research study consists of the top banks with high NPA and response was received from the middle-level managers from the bank outlets' regional offices in Northern India through a structured questionnaire. The analysis finds a set of 16 variables identified through the literature review. Statistical analysis SPSS was used that helped to run the factor analysis test. The results indicated that the NPA level in public sector banks was much higher than the private banks. The primary reason behind the surging non-performing assets is the borrowers' creditworthiness, kind of loan, collaterals, the quality of the assets, and absence of an effective monitoring system.