Critical analysis of Non-Performing Assets of State Bank of India and Punjab National Bank

Abstract

Banks are very important to an economy because they pass on the money they receive from their customers. The non-performing assets plays an important role in reducing the profits of banks, which ultimately affects the im-age of the bank and also affects the quality of work of a bank. In the present study, an attempt has been made to study the relationship between gross non-performing assets and advances of State Bank of India and Punjab National Bank and also to study the impact of net non-performing assets of the concerned banks. From the results, it is found that there is a correlation between gross non-performing assets and advances of both banks and it is also found that net non-performing assets affect the profitability of the concerned banks. The present study is limited to only two banks, namely State Bank of India and Punjab National Bank, and is based purely on secondary data collected from various websites, journals and re-ports of the banks concerned. Twelve years of data, i.e., from 2011 to 2022, were used for the study. The study also recommends that banks should exercise appropriate due diligence in disbursing loans.