A COMPARATIVE STUDY OF NPA IN ICICI BANK AND HDFC BANK

Abstract

Banking sector in India is a rising sector. It promotes saving habits as well as encourages entrepreneurs for loans. The purpose of the study is to understand the working of NPA in apex Private Sector bank and how to reduce NPA. For this we can use ratio analysis and correlation. Gross NPA ratio is used to check whether the bank’s gross NPA are increasing. It is indicating that the bank is adding a fresh stock of bad loans. It would mean the bank is either not exercising enough causing when offering loans or it is too lax in terms of following up with borrowers on timely repayments. Net NPA reflects the performance of banks. A high level of NPAs suggests high probability of a large number of credit defaults that affect the profitability and net worth of banks and also wear down the value of the asset. Loans and advances usually represent the largest asset of most of the bank. It monitors quality of the bank’s loan portfolio.