Factors affecting non-performing assets in Indian banking system: An analysis of employee's perception

The presence of non-performing assets (NPAs) has a significant impact on a bank's solvency, profitability, and liquidity. This research paper aims to investigate the perception of bank employees regarding the factors such as risk, challenges, reforms in efficiencies and incentives in relation to NPAs in public sector banks (SBI and PNB) and private sector banks (ICICI and HDFC) in India. A structured questionnaire was administered to bank employees to gauge their perception of NPA occurrence. The study also identifies various variables influencing NPAs and provide suggestions for expediting their recovery. The paper identifies and analyzes the causes influencing non-performing assets) and suggests appropriate strategies for monitoring and control. The study analyzes the factors influencing NPAs in both sectors. Some identified reasons for NPAs include siphoning of funds for other purposes, ineffective monitoring, lack in credit appraisal, economic downturn political pressure etc.