A study on the Effectiveness on Public and Private Sector Banks to Manage NPAs with Available Recovery Tools in India

Abstract

The study based on existing literature, reviewed the paradigm changes in the reforms newlineintroduced in banking sector, their asset quality, the effectiveness of existing recovery newlinechannels. In alignment with the focus of the study the review of literature guided the research on NPA management based on two broad criteria. The first criterion was to study the newlineresearch done to study bank-category specific management of NPAs. The second newlinecriterion was to analyse recovery tool specific effectiveness. The objectives thus were to newlineassess asset quality of the banks, identifying the impact of determinants of recovery, newlineassessing the bank specific strength of the banks in NPA management and effectiveness newlineof recovery channels available to the banks. The study identified 40 banks. These banks on the basis of ownership were segregated in two category namely public sector banks and private sector banks. Time period taken for the study is fourteen Years i.e. from March 2005 till March 2018. In line with the research problem the research conducted was done keeping five objectives wherein the objectives were related to analysing the comparative ratios newlineamong public and private banks, identifying the determinants and impact of these newlinevariables on recovery of banks, examining the bank group-wise effectiveness of each newlinecategory, examining the comparative effectiveness of recovery tools available for newlinerecovery. The study also assessed the HRD climate prevailing in the banks newlineThe methodology used in the study is sub divided into two sections. First section is newlinebased on secondary data, and the data used is in panel format. The study concluded that any legislation dealing with economic matters is bound to face practical problems which are highly complicated and thus cannot be solved with one strait jacket formula. newline newline