Nexus Between NPAs and Profitability. This item is unavailable.Nexus Between NPAs and Profitability

The Indian banking sector, particularly PSBs, has faced persistent challenges from high levels of NPAs, which adversely affect financial performance and stability. The study examines the trend and pattern of NPAs and their relationship with key profitability indicators of Indian PSBs using secondary data from RBI data and publications for 2010-25. The study covers the pre-crisis period, the NPA crisis period (2016-20), and the post-recovery period (2021-25), providing a comprehensive assessment of changes in asset quality and profitability over time. The key variables include GNPA, NNPA, ROA, ROE, and NIM. Correlation analysis is employed to examine the relationships between NPAs and profitability, while multiple regression analysis evaluates the impact of NPAs on profitability. The findings indicate that NPAs have a significant negative impact on the profitability of PSBs, primarily due to higher provisioning requirements and reduced income generation. The study concludes that effective NPA management, prudent credit assessment, and stronger risk-management practices are essential for improving the profitability, financial stability, & sustainability of Indian PSBs.