Vol. 5, Issue 1, Part C (2019)

Abstract
Rising NPAs is one of the major concerns for banking system in India. It reflects the performance of banks and affected the whole economy. The financial health of the banking sector can be assessed by the level of NPAs in the banks. NPAs affect the asset quality, credit risk and efficiency in the allocation of resources to productive sectors. The earning capacity and profitability of many banks and financial institutions had been adversely affected by the high level of NPAs. The Indian banking sector is facing a serious problem of Non-Performing Assets. The Govt. of India and Reserve Bank of India has initiated various measures to control the growing level of NPAs. Priority Sector Lending (PSL) refers to those sectors of the economy which may not get timely and adequate credit in the absence of this special dispensation. Non-Priority Sector lending (NPSL) is the sector towards which financial institutions are always ready to lend credit. This sector is still attracts finance every time. It covers all the remaining sectors which are other than PSL. This paper intended to explore a brief comparison between priority and non-priority sectors NPAs and also examined whether there is a significant impact of priority sector NPAs and Non-priority sector NPAs on total NPAs of Public Sector Banks (PSBs) in India and find out the effect of gross advances on total NPAs of PSBs. This study conducted on secondary data. The period of the study is 10 years i.e., from 2008 to 2017. Statistical tools like percentage, mean, standard deviation, correlation, t-test have been used to analyse the data.