Role of Increasing Levels of Non Performing Assets in Bank's Deteriorating Financial Position: A Review of Literature

Abstract

Non Performing Assets (NPA) have witnessed a tremendous increase since the world wide recession of 2009 . The Reserve Bank of India (RBI) along with the Indian Government have implemented rules and issued directives to control the rising level of NPA, but have failed . The ever rising NPA level has resulted in the fall of the income and profitability level of the bank , further resulting in their failures . The study comprises of review of literatures published b y renowned researchers on Rising NPA’s and Bank failures . The study comprises of explanation of different views of academicians and regulators . A total of 105 research papers, published in eminent journals , have been reviewed . The main purpose of the study is to discuss the various causes instigating the rising level’s of NPA . It also studies the role of these causes in the downfall of the various banks. It is undisputed that the road to recovery is very long but the study recommends the measures which can be taken to control and reduce the rising NPA levels.

Keywords: Banks, Non-performing assets, Stressed assets, Bad Loans, Assets quality, RBI