Non-Performing Assets of State Bank of India: An Empirical Analysis

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Yojna Bansal, (Dr.) Harsh Purohit, Dr. Vijaya Kumar


Indian banking sector has witnessed steep increase in level of non-performing assets (NPA) along with growth of banking sector and economy as a whole. Non-performing Assets of State Bank of India, which is the largest public sector bank of India, has doubled over past 10 years. It has grown significantly in past 2 decades but the financial performance of the bank has deteriorated drastically during the period 2009-10 to 2019-20. For this paper statistical techniques of Person’s correlation and multiple & stepwise models of regression have been employed for establishing the influence of NPA on the profitability of State Bank of India. Among the bank-specific determinants, return on net worth has shown a significant negative correlation with gross NPA and net NPA, whereas provision coverage ratio has shown an insignificant relationship with profitability. Moreover, the stepwise regression model indicated that gross NPA is the single most significant factor affecting the profitability, suggesting that the gross NPA is more intrinsic than the other selected NPA indicators

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