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IJSTR >> Volume 9 - Issue 1, January 2020 Edition

International Journal of Scientific & Technology Research  
International Journal of Scientific & Technology Research

Website: http://www.ijstr.org

ISSN 2277-8616

Factors Affecting Non Performing Loan In India

[Full Text]



S.Prasanth, P.Nivetha, M.Ramapriya, Dr. S.Sudhamathi



Commercial Bank of India, Non-Performing Loans (NPLs), Loan Growth Rate (LGR), Loan to Deposit Ratio (LDR), Cost Efficiency Ratio (CER), Capital Adequacy Ratio (CAR), Return on Equity (ROE) and Bank Size (SIZE).



This study investigates the factors affecting Non-Performing Assets of Commercial Bank of India during the period from 2015 to 2019. The variables were preferred based on conclusion from the previous literatures. Secondary time series statistics were collected from audited yearly reports and performance reports of the bank and for data purposes I have taken details of two banks (Indian Bank and SBI) ; and the required ratios were calculated. Multiple linear regression equation was used to determined the model using SPSS version 20 software. The result realise from regression output determined that between the calculated variables, loan to deposit ratio; financial performance measured in return on equity; and capital adequacy remain establish to be statistically significant determinant of NPLs. diversely, loan growth, cost effectiveness and bank size were analytical insignificant in affecting NPL. The findings reveals that, variables for example poor credit risk evaluation, concentrate on collateral based lending, poor loan monitoring and follow-up, poor banker’s ability in commencing with lending matters, undiversified loan products, short loan life and lack of credit advisory practices were also the bank specific factors that affect NPLs. The study prefers that concentrating on these NPL could further diminish the probability of default while extending credit in the future. Further studies were suggested by counting macroeconomic and other bank specific variables; and by rising the sampled periods.



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