Purpose This study examines whether the post-COVID-19 decline in non-performing assets (NPAs) in India’s banking sector reflects pandemic-specific policy interventions or longer-term structural reforms implemented prior to the crisis. Design/methodology/approach The study employs a mixed-methods research design combining econometric analysis with qualitative policy triangulation. Using an unbalanced panel dataset covering Indian public, private, foreign, and scheduled commercial banks from 2004 to 2024, the analysis applies descriptive statistics, OLS regressions, and dynamic panel estimation using the two-step System Generalized Method of Moments (GMM). A two-sample t-test compares pre- and post-COVID NPA dynamics, while robustness checks and diagnostic tests validate model stability. Findings Gross and net NPAs in Indian banks peaked around 2018 and declined thereafter. Statistical analysis indicates that the rate of decline in NPAs after 2020 is not significantly different from the pre-pandemic trend. These findings suggest that improvements in asset quality are more consistent with structural reforms—particularly the Insolvency and Bankruptcy Code (IBC) and the RBI’s Prompt Corrective Action framework—than with temporary COVID-era relief measures. Originality/value The study provides a 21-year longitudinal assessment of NPA dynamics in India’s banking sector, integrating econometric modeling with policy analysis to distinguish structural reforms from crisis-driven interventions. The results contribute to the literature on financial resilience and regulatory effectiveness in emerging banking systems.
Marco I. Bonelli (Mon,) studied this question.