Impact of Gross Advances on Gross Non-Performing Assets: An Analysis of Scheduled Commercial Banks

Abstract

When banks have many non-performing assets, it indicates issues with borrowers. This affects bank finances, leading to lower profits and asset value, and a risk of insolvency. The impact extends beyond the banking sector, affecting the broader economy. High NPAs in banks show systemic challenges across industries. Addressing NPAs is crucial for financial stability and economic prosperity. Changes in global finance highlight the importance of understanding how lending growth affects bank asset quality. This study examines the link between bank loan growth, aggressive credit policies, poor loan appraisal, and increased loan defaults. It also explores the relationship between NPAs and Gross Advances. Trends in NPAs over 10 years are analyzed for selected commercial banks, including public, private, and foreign banks.