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NPA and Select Key Financial Heads: an Empirical study of Commercial Banks of India using Multiple Regression Modelling

Author

Listed:
  • Prerna BAMORIYA

    (Govindram Seksaria Institute of Management & Research, India)

  • Rajendra JAIN

    (Govindram Seksaria Institute of Management & Research, India)

Abstract

Non Performing Assets (NPAs) is one of the critical problems that have shaken the banking sector in India. There are many studies on internal and external factors affecting NPAs level, but this study attempts to specifically analyze impact of Key Financial Heads on NPA of Scheduled Commercial Banks of India to suggest banks on effective management of NPAs. For this Multiple Regression Modeling was used. Secondary data was taken from four representative banks for a period of 10 years starting from year 2002-03 to 2012-13. Among Key Financial Heads, Total Assets and Total Deposits had significant impact of NPA level. Further, Total Deposits was found to be contributing most to the NPA level. Banking sector is an indispensable financial service sector where threat of increase in NPAs affects the liquidity and profitability of banks. Thus this study made important implications to banks on effective management of NPAs.

Suggested Citation

  • Prerna BAMORIYA & Rajendra JAIN, 2013. "NPA and Select Key Financial Heads: an Empirical study of Commercial Banks of India using Multiple Regression Modelling," The Journal of Accounting and Management, Danubius University of Galati, issue 2, pages 19-25, August.
    • Handle: RePEc:dug:jaccma:y:2013:i:2:p:19-25
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    File URL: http://journals.univ-danubius.ro/index.php/jam/article/view/2127/1926
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    References listed on IDEAS

    as
    1. Ariff, Mohamed & Can, Luc, 2008. "Cost and profit efficiency of Chinese banks: A non-parametric analysis," China Economic Review, Elsevier, vol. 19(2), pages 260-273, June.
    2. Das, Abhiman & Ghosh, Saibal, 2006. "Size, Non-performing Loan, Capital and Productivity Change: Evidence from Indian State-owned Banks," MPRA Paper 17396, University Library of Munich, Germany.
    3. Yoonhee Tina Chang, 2006. "Role of Non-Performing Loads (NPLs) and Capital Adequacy in Banking Structure and Competition," Working Papers 06-15, Centre for Competition Policy, University of East Anglia.
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