Non-Performing Assets of Indian Banks Since The 2008 Global Financial Crisis: A Comparison by Ownership and Lending- Priority for The Period 1998 to 2018

Kajal Sharma, Himmat Singh Rat


The paper aims to ascertain changes in the levels of the non-performing assets (NPAs) of Indian banks following the 2008 global financial crisis. The study is designed to glean the noteworthy trends and issues concerning the NPAs based on secondary data for the years 1998 to 2018 through three sequential steps of comparing by t-test: the NPAs in the public sector banks (PSBs) with those of the new private banks (NPBs); NPAs of the PSBs before the global financial crisis with those after the onset of the crisis; and NPAs of the PSBs in the priority sector with those in the non-priority sector. The PSBs had a significantly higher level of NPAs compared to the NPBs. The yearly average of NPAs of the PSBs for the period after the onset of the crisis is higher compared to the period before it even though the difference is not statistically significant. However, the significantly higher value of the coefficient of variance in the post- crisis period reflects a rising trend within this post-crisis period. The other significant finding of the study is the emergence of the non-priority sector as the main driver of the rise in NPAs of the PSBs during the post-crisis period. The study pointedly examines the issue of NPAs in a layered, direct, and straightforward manner, which is not usually the case with most of the studies of NPAs.

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