Vol. 2, Issue 9, Part J (2016)

Abstract
The Banking industry is one of the basic instruments of economic growth. A strong banking sector is important for flourishing economy. The failure of the banking sector may have an adverse impact on other sector. Non Performing Assets is one of the major concerns for banks in India. NPAs reflect the performance of banks. The earning capacity and profitability of the banks are highly affected because of the existence of NPAs. A high level of NPAs suggests that large number of credit defaults that affect the profitability and net-worth of banks. The public sector banks have shown very good performance over the private sector banks as far as the financial operations are concerned. However the position of public sector banks is not so good in the area of Non-Performing assets as compared to private sector banks. The study is based on the secondary data retrieved from annual reports of the respective banks. The scope of the study is limited to the analysis of Non-Performing assets of select public and private sector banks. The data has been analysed by statistical tools such as ratio and correlation. The study observed that the private sector banks were more efficient than the public sector banks. In this paper made an attempt to analyse how efficiently the selected public and private sector banks managed their NPAs and to evaluate the impact of NPA on profitability measure on Return on Assets.