Review of Literature Indian Institute of banking and finance describe Naps as An asset, including a leased asset, which ceases to generate income for the bank or NAP (as classified by financial institutions) refers to loans that are In Jeopardy of default. In banking sector, the problem of Naps has been revisited In several studies. The concept of Non- Performing Assets was Introduced following Introduction of Income Recognition and Asset Classification (IIRC norms), in the year 1993.
Y. V. Reedy (2009), in his article Global Financial Turbulence and the Financial Sector in India: A Practitioners Perspective” states as under: “During 1992-93, the prudential norms relating to income recognition, asset classification and provisioning were introduced and are being continuously monitored and refined to bring them on par with international best practices. To keep aligned with these norms, large number of measures were introduced in 2005-06.
In November 2005 and January 2007, the provisions for standard assets were revised through the series of changes, in view of the perpetual sigh credit growth In the personal loans, credit card receivables, real-estate sector and loans and advances qualifying as capital market exposure and a higher default rate with regard to personal loans and credit receivables, which comes out as a matter of grave concern. ” Neared Hydra (20031 In his paper “The Reserve Bank of Indian’s Balance Sheet: Analytics and Dynamics of Evolution” states: The analysis shows that terms of credit variables have effect on the banks’ non-performing assets.
For instance, the bank size measured in terms of capital, has positive impact on Naps, hill the measure of bank size in terms of assets has negative effect. Dry. Amanita Ragout (2012), in her paper on “Management of Non-performing Assets- A study on Indian Public Sector Banks” has said that Non-performing asset pose a serious threat to banks all over the world. The non-recovery of loan installment and the interest on the loan has harmed the loan-disbursement process. Because of this, measure of stronger capital adequacy Like CAR has been given significant Importance In the recent past.
The method of compromise settlement has also been effected by he banks In recent past. Kumar (2013), In his study on “A Comparative study of NAP of Old Private Sector Banks and Foreign Banks” has said that Non-performing Assets (Naps) have become a deep trouble and headache for the Indian banking sector for the past several years. Accumulation of huge non-performing assets (Naps) was the key issue challenging the performance of commercial banks in the late ass. The quality of loan portfolio is of paramount importance for the health and existence of the banks.
High level of (Naps) has umpteen repercussions on profitability, radioactivity, solvency, liquidity, capital adequacy and image of the bank. Syria K. K. And P. Australians Pillar (201 2), in their Journal on “Efficiency of NAP Management in Indian CBS -A Bank-Group Wise Exploratory Study” has clearly emphasized that Issue of NAP and Its negative impact on erosion of profit and quality of asset was not seriously considered In Indian banking prior to 1991. There are large numbers of reasons cited for the alarming level of NAP In Indian banking sector. Indian Banking
