AN EMPIRICAL STUDY ON NON-PERFORMING ASSETS WITH SPECIFIC REFERENCE TO HDFC BANK LTD

Author Name: 1. Nitin Bhasker, 2. Palaksha Gombi

Volume/Issue: 01/11

Country: India

DOI NO.: 08.2020-25662434 DOI Link: http://www.doi-ds.org/doilink/04.2021-13413366/UIJIR

Affiliation:

¹Assistant Professor, KLES IMSR, BVB Campus, Vidyanagar, Hubli -580031

²MBA 3^rd Semester student, KLES IMSR, BVB Campus, Vidyanagar, Hubli -580031

ABSTRACT

Banking sector plays an important role in the development of an economy. Any problem in this sector will often extend to real sector. Assets quality was not a prime concern of the banks till 1991. Banks mainly focused on expansion, development of rural areas, priority sector lending etc. But now the prime challenge is mounting pressure of NPAs. NPAs engulf the public sector banks as well as private sector also. It not only affects the banking sector but the whole economy as well. Banks often lean into the risk free investment that is not conducive for the growth of economy. The level of non-performing assets (NPAs) best indicates the soundness of the banking sector of a country. The assessment of private sector banks reveals that the growth rate of NPAs is low as compared to the nationalized banks. Schumpeter, the first modern economist considered banks to be the most important of all the financial intermediaries in the financial system of a country. But in recent times the banks have become very cautious in providing loans, the reason behind is the non-performing assets. Non-Performing Assets are defined as the loans which have ceased to generate any income for a bank whether in the form of interest or principal amount. The main source of data for this study is the past records prepared by the bank. It is to determine that the NPA’s of the bank since its inception and to identify the ways in which the performance especially the non- performing assets of HDFC BANK can be improved.

Key words: Non-performing assets, private sector banks, HDFC Bank, banking sector, financial system.