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Determinants of non - performing assets of commercial banks in India: an econometric study

Jayaraman, T.K. and Makun, Keshmeer and Sharma, Ajeshni (2018) Determinants of non - performing assets of commercial banks in India: an econometric study. International Journal of Engineering and Technology, 10 (3). pp. 774-783. ISSN 2319-8613

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    Gross non-performing assets (NPA) as a proportion of gross assets of India’s commercial banks in the public and private sectors as well in banks owned by foreign interests have been rising for the past few years. Gross NPAs of all commercial banks, as a proportion of total assets are 10.8%, as of March 2018. In the case of the public sector banks, which dominate the banking sector with a share of 70% of business, the gross NPA as percent of total assets is 14.5%. This paper is an empirical studyfocuses on causal factors, which are macroeconomic as well as bank specific that influences NPA. We employ the Autoregressive Distributed Lag (ARDL) procedure and conduct Bounds F- Tests, by using sixty quarterly observations (fiscal years 1999-2000 to 2015-16) to explore the effects of these determinants. The study findings reveal that real GDP, gross advances, total expenditures and price level are important determinants of NPA in India’s commercial banks.

    Item Type: Journal Article
    Subjects: H Social Sciences > HB Economic Theory
    H Social Sciences > HG Finance
    Divisions: Faculty of Business and Economics (FBE) > School of Economics
    Depositing User: Keshmeer Makun
    Date Deposited: 03 Jun 2020 14:15
    Last Modified: 03 Jun 2020 14:15

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